Britain's leading share index ticked down early on Wednesday as weakness in oil producers and banks eclipsed gains in British Energy after France's EDF launched a bid for the group.
British Energy surged 5.8% to top the FTSE 100 gainers after France's EDF launched a 12.5 bln pound ($23.14 bln) agreed takeover bid on the UK nuclear power operator.
EDF and Centrica, which owns British Gas, are in talks about Centrica taking a 25% stake in the new British Energy following EDF's completion of the deal. Centrica shares strengthened 2.7%.
By 0754 GMT, the FTSE 100 was down 8.5 points, or 0.2% at 5,127.6, after losing 1.9% on Tuesday. The UK benchmark has fallen 20.1% so far this year.
"There is a lot of indecision in the market. It's just a question of getting through the stalemate in the Congress," said Angus Campbell,
"It's a bailout of the financial sector, which in the long-term will have an effect on the economy. But either way it's a question of putting toxic debt onto government's books rather than corporate books and it won't necessarily mark the bottom of the financial market."
Banks were mostly weaker, with the FTSE 350 bank index down 0.8% despite the news of Warren Buffett's Berkshire Hathaway Inc investing $5 bln in Wall Street bank Goldman Sachs.
HSBC, Lloyds TSB and Standard Chartered were down. But Royal Bank of Scotland and HBOS were up.
Barclays added 1.3%. The head of Barclays's Italian unit said the lender is interested in bidding for 150 branches that Banca Monte dei Paschi di Siena must sell partly meet antitrust concerns.
Man Group eased 0.6%. A source close to the hedge fund group said the company had asked the UK Financial Services Authority to extend its ban on short-selling to Man Group shares.
Energy stocks also eased, with BP, Royal Dutch Shell, BG Group and Tullow Oil down between 0.3 and 2.9%.
Imperial Tobacco gained 2.1% after the world's fourth largest cigarette maker said its trading was in line with its expectations as it made progress with the integration of Altadis, particularly in France.
Rival British American Tobacco added 1.3%.
Smiths Group rose 3.2% after the British engineer posted a 10% rise in underlying full-year profit, at the top end of forecasts, and announced three-year sales growth and margin targets for its five businesses.
Miners were generally firmer, with BHP Billiton, Xstrata and Rio Tinto up. But Kazakhmys, Antofagasta, Anglo American and Eurasian Natural Resources were down.
Lonmin fell 0.7% after the Financial Times said confidence was waning that Xstrata would proceed with a formal 5 bln pound offer for Lonmin.
Vedanta Resources said it dropped plans to streamline its corporate structure into three units. Vedanta shares were down 3%.
Inmarsat, G4S, Petrofac and Aviva fell after going ex-dividend.
