The FTSE 100 ended with tiny gains on Friday as mixed U.S. data failed to move bullish investors who remained cautious ahead of the upcoming U.S. elections.
The FTSE 100 <.FTSE> closed up 6.63 points at 5,868.55.
The index traded in a 40-point range all day and in weak volumes, suggesting fund managers remain onlookers in markets which have struggled for direction since central banks stepped in to support the financial system in early September.
The FTSE 100 swung into positive territory after U.S. jobs data beat expectations with employers adding 171,000 people to their payrolls last month.
But the combination of a sharp rally in equities on Thursday, a weak investment outlook and still high unemployment in the world's biggest economy saw momentum capped.
"(The non farm payrolls) is far from a stellar game changing number ... The fact of the matter is this has been one of the slowest recoveries in the labour market in recent history probably since the 1930s," Peter Dixon, economist at Commerzbank, said.
The slow growth environment, knife-edge U.S. elections, both presidential and congressional, and the approaching "fiscal cliff" -- automatic cuts if no agreement to change them -- has prevented investors from making large bets either way in equity markets.
"With no real clarity yet as to the outcome of the U.S. election, we think it is prudent to bide our time," Oliver Wallin, Investment Director at Octopus, said.
"(We) are not prepared to take any significant positions against the market, or make any changes to our longer term strategic asset allocation," he said.
That uncertainty has kept the FTSE tethered in a 260 point range since September 7 and struggling to break above resistance levels.
The 60-day relative strength index shows equities barely above fair value and while the 50-day moving average remains in support and a sideways market is the most likely scenario, according to strategists.
Nicolas Suiffet, technical analyst at Trading Central, said the break above 5,845 reinstated a bullish bias on the FTSE 100 but would only open the way to a further rise towards 5,885.
ADMIRAL REVENUES REVERSE
In subdued markets the UK's most notable movers were driven by results.
Admiral fell 5.3 percent, topping the list of fallers on the FTSE 100, after the British motor insurer reported a dip in quarterly revenue amid weakening car insurance prices.
Revenues remain a worry for investors in European companies as a whole, with 50 percent of corporates missing revenue expectations so far in the current quarter, according to Thomson Reuters Starmine Data.
Royal Bank of Scotland gave up some of its previous gains, falling 2.1 percent as the part-nationalised lender reported an increase in third-quarter operating profit but said it may face fines in relation to how it set Libor and other interest rates.
Third-quarter earnings from European companies have slightly lagged behind their U.S. counterparts, with 57 percent of the firms that have already reported results meeting or beating predictions, against 68 percent in the United States.
There was positive news for the luxury goods sector with Burberry up 3.1 percent in response to U.S. clothing company Ralph Lauren's higher-than-expected quarterly earnings, which followed upbeat results from Richemont on Thursday.
Tullow Oil added 2.7 percent after JP Morgan upgraded its rating on the explorer to "overweight" from "neutral".
(Written by David Brett. Editing by Jeremy Gaunt.)