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The FTSE 100 was virtually flat, tipping marginally higher, as concerns about the rising rate of coronavirus in Asia offset more positive economic data in Europe.
London traders were cautious on Friday as the latest borrowing and retail sales data updates were robust and broadly aligned with expectations.
London’s top flight closed 0.32 points higher at 6,938.56 on Friday.
The leading Eurozone markets were red at the end of trading despite PMI figures which revealed robust jumps in both services and manufacturing activity as restrictions were unwound.
Elsewhere, the German Dax decreased by 0.27% and the French Cac moved 0.15% lower.
Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a lacklustre end to what has been a negative week for European stocks, with concerns about surging Covid-19 infection rates in Asia weighing on sentiment over the past few days.
“Sentiment has improved slightly as the day has progressed given some of this morning’s economic data, however enthusiasm has been tempered somewhat by last night’s reports that President Biden was looking at ramping up capital gains tax on Americans with annual income in excess of one million dollars.”
US stocks ticked higher on the opening bell as they sought to recover their losses from Thursday’s nervous session.
Meanwhile, sterling rose against a weak dollar as the US greenback continued its disappointing week ahead of the latest Federal Reserve rates decision.
The pound increased by 0.07% versus the US dollar to 1.384 and was down 0.4% against the euro at 1.147.
In London, financial firms had another broadly positive session despite tentative sentiment, with a raft of the banks pushing higher ahead of earnings announcements next week.
In company news, transport operator FirstGroup saw shares jump after it completed the sale of two US divisions for £3.3 billion.
Bosses offloaded the First Student and First Transit businesses to EQT Infrastructure more than a year after first announcing plans to quit North America following pressure from activist investors.
Shares in the company were 3.8p higher at 88.9p at the close of play.
Office owner Workspace Group slid after it saw a double downgrade by analysts at Barclays.
Shares in the company fell by 37.5p to 798.5p after the analysts warned that they thought there was “too much” reopening optimism priced into the flexible office group’s valuation.
Elsewhere, Harry Potter publisher Bloomsbury gained after it snapped up Red Globe Press assets from Macmillan Education for £3.7 million. It closed 23p higher at 303p.
The price of oil nudged higher amid positivity about the economic recovery in Europe and what that might mean for the energy markets.
The price of Brent crude oil increased by 0.61% to 65.8 dollars per barrel.
The biggest risers on the FTSE 100 were Flutter Entertainment, up 390p at 15,295p, Evraz, up 16.4p at 646.6p, DS Smith, up 10.1p at 423.2p, and Rio Tinto, up 114p at 6,119p.
The biggest fallers of the day were Sainsbury’s, down 6.5p at 242.2p, Reckitt Benckiser, down 147p at 6,654p, IAG, down 3.76p at 196.74p, and Hikma, down 45p at 2,392p.