Sharecast - At 0900 GMT, the top-flight index was up 0.2% at 7,732.89.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV), said: "Caution has returned, as investors have begun to re-assess the prospects for interest rates and just how resilient economies will be over the months to come.
"There is also fresh nervousness about the prospects for conflict in the Middle East to escalate after a drone strike killed Hamas deputy leader Saleh al-Arouni in Lebanon. Israel is bracing for retaliatory action from Hezbollah, another twist in an already highly complex and tragic situation in the Middle East."
Investors were also looking ahead to the release of the latest minutes from the US Federal Reserve, due after the close of markets.
Richard Hunter, head of markets at Interactive Investor, said: "As ever, the minutes will be closely scrutinised for any changes in Fed rhetoric, with particular regard to its current stance on the likelihood of rate cuts.
"Currently, the consensus is overwhelming that the Fed will keep rates unchanged this month, with the majority expecting the first cut to be announced in March."
In equity markets, Entain (LON:ENT) was the standout gainer on the FTSE 100 as it announced the appointment of Eminence Capital founder Ricky Sandler as a non-executive.
GSK PLC (LON:GSK) was also in the black after an upgrade to ‘buy’ at Jefferies.
Supermarket retailers Sainsbury’s and Tesco (LON:TSCO) advanced after the latest data from Kantar showed that retailers enjoyed their busiest Christmas since 2019.
Luxury fashion brand Burberry was knocked lower by a downgrade to ‘hold’ from ‘buy’ at Stifel.
Elsewhere, budget airline Ryanair (LON:0RYA) fell as it reported a 9% jump in December passenger numbers but cautioned that the removal of its flights from online travel agents will dent short-term load factors and soften short-term yields.
The budget airline said traffic rose to 12.54 million from 11.52 in the same month a year earlier, while the load factor - which gauges how full the planes are - ticked down to 91% from 92%.
The airline also noted that early last month, OTAs such as Booking (NASDAQ:BKNG).com, Kiwi and Kayak suddenly removed its flights from sale on their websites. Ryanair said that while these OTAs only account for a small fraction of its bookings, it expects the removal to reduce short term load factors by 1% or 2% in December and January and also to soften short term yields as it responds by making more low fares available directly to consumers.
The airline does not expect the move to materially affect its FY24 traffic or profit after tax guidance, however.
Hungary-based budget airline Wizz Air (LON:WIZZ) was also in the red even as it reported a strong rise in December passenger numbers as demand continued to rebound from the Covid pandemic.
Market Movers
FTSE 100 (UKX) 7,732.89 0.15%
FTSE 250 (MCX) 19,498.90 -0.07%
techMARK (TASX) 4,299.18 0.31%
FTSE 100 - Risers
Entain (ENT) 1,009.00p 2.39%
GSK (GSK) 1,510.60p 2.08%
Sainsbury (J) (SBRY) 304.10p 1.77%
Unilever (LON:ULVR) 3,878.50p 1.41%
Tesco (TSCO) 296.90p 1.30%
Haleon (LON:HLN) 328.25p 1.25%
Marks & Spencer Group (MKS (LON:MKS)) 278.90p 1.05%
Vodafone Group (LON:VOD) 70.49p 1.05%
British American Tobacco (LON:BATS) 2,354.50p 0.99%
Beazley (BEZ) 531.00p 0.95%
FTSE 100 - Fallers
Anglo American (JO:AGLJ) (AAL) 1,926.20p -2.13%
Glencore (LON:GLEN) 460.35p -1.78%
Fresnillo (FRES) 561.80p -1.61%
Ocado Group (LON:OCDO) 728.80p -1.46%
Rentokil Initial (LON:RTO) 427.10p -1.25%
Spirax-Sarco Engineering (SPX) 10,105.00p -1.08%
Diploma (LON:DPLM) 3,416.00p -0.99%
Antofagasta (LON:ANTO) 1,636.00p -0.94%
Prudential (LON:PRU) 848.20p -0.93%
Rio Tinto (LON:RIO) 5,839.00p -0.88%
FTSE 250 - Risers
JTC (JTC) 810.50p 1.69%
Hiscox Limited (DI) (LON:HSX) 1,070.00p 1.42%
SSP Group (SSPG) 231.80p 1.31%
Pantheon International (PIN) 314.50p 1.29%
Babcock International Group (LON:BAB) 425.40p 1.29%
Supermarket Income Reit (SUPR) 87.40p 1.27%
Baltic Classifieds Group (BCG) 245.00p 1.24%
Wetherspoon (J.D.) (LON:JDW) 814.00p 1.18%
Lancashire Holdings Limited (LRE) 629.00p 1.13%
Ithaca Energy (LON:ITH) 147.00p 1.10%
FTSE 250 - Fallers
Tyman (TYMN) 306.50p -3.46%
Hochschild Mining (LON:HOCM) (HOC) 100.80p -2.89%
Tullow Oil (LON:TLW) 37.34p -2.46%
Mobico Group (MCG) 82.05p -2.26%
AO World (AO.) 91.05p -2.10%
Ashmore Group (ASHM) 220.40p -2.04%
Workspace Group (LON:WKP) 553.00p -1.95%
Bank of Georgia Group (LON:BGEO) 3,930.00p -1.87%
Carnival (NYSE:CCL) 1,243.50p -1.82%
Harbour Energy (LON:HBR) 311.30p -1.77%