Uncertainty over the stalemate between Greece and its international creditors left the London market in negative territory on Thursday.
The FTSE 100 Index lost more than 50 points during the morning but regained its composure to stand 8.1 points adrift at 6672.45 in early afternoon trading.
Traders stayed largely on the sidelines in the absence of any firm news on the stand-off between Athens and the IMF, the European Central Bank and Brussels.
Chancellor Angela Merkel voiced hopes that a deal could still be struck before the deadline for Greece to make the latest instalment of its debt repayments.
But markets remained unimpressed by reports that the ECB and European Commission were drafting a statement on the issue of Greek debt relief.
A slightly better-than-expected retail sales figure in the UK also failed to lift spirits.
Connor Campbell at spreadbetting firm Spreadex said: "The FTSE has already grazed fresh five-month lows this morning, a situation that could worsen as the day goes on."
The Dow Jones ended Wednesday around 30 points higher at 17,935, while the S&P 500 and Nasdaq each moved around 0.2% higher to 2,100 and 5,064 respectively.
In the key commodities markets Brent crude was priced just below US$64, while WTI was just under US$60. At US$1,197 per ounce the gold price was up just under 2%.
On the equity markets, Poundland (LON:PLND) was 9.8p down at 301.3p after the discount retailer racked up record sales but arned that first half results this year will be ‘relatively subdued’.
Gaming software group Playtech (LON:PTEC) was off 12.5p at 795.5p after announcing a placing to raise £250mln to fund acquisitions including online trading platform Plus500.
Housebuilder Berkeley Group (LON:BKG) fell 61p to 3420p as Liberum Capital downgraded the stock to 'hold' after results on Wednesday, saying the shares had hit fair value.
Model railway maker Hornby (LON:HRN) chugged 5.12p lower to 94p after it said it was moving to the AIM market and raising £15mln in a placing.
Personal health monitoring group Fitbug (LON:FITB) ticked up 0.05p to 4.62p as it announced an agreement with inflight retail specialist, Scorpio Worldwide, to include a Fitbug/Kiqplan product bundle within its range of products promoted to major airlines.
Self-storage group Safestore advanced 2p to 279.25p after reporting a modest rise in half-year profits on the back of better economic conditions in the UK and France.
Elsewhere, investors in oil explorers involved in the Horse Hill project near Gatwick Airport in East Sussex gave a mixed reaction to news that the find may contain more than 9.2bn barrels of oil.
Shares in Horse Hill stakeholders Solo Oil (LON:SOLO) fell 0.01p to 0.5p, while shares in Doriemus (LON:DOR), Stellar Resources (LON:STG) and Evocutis (LON:EVO) were flat.
There was also a varied response from investors in Europa Oil & Gas (LON:EOG), Egdon Resources (LON:EDR) and Union Jack Oil (LON:UJO) to news that production testing had begun at the onshore Wressle discovery well in Lincolnshire. Europa's stock dropped 0.25p to 7.88p, but Egdon's shares jumped 1.38p to 15.12p and UJO's shares were flat at 0.21p.
News that Haydale (LON:HAYD) had landed a deal to supply its reactor to an organisation looking to commercialise graphene boosted its shares by 3.5p to 128.5p.
Investors dumped shares in Sirius Minerals (LON:SXX) by 3.5p to 18p after planning officials said the potash miner had underestimated the environmental damage its York Potash mine project might cause in the North York Moors National Park.