Sharecast - At 0840 BST, the FTSE 100 was down 0.1% at 7,582.93.
Earlier, the PBOC cut two key lending rates as it looks to bolster the economy.
The central bank cut the one-year loan prime rate by 10 basis points to 3.55% and the five-year rate by 10 basis points to 4.2%. This was the first such move in 10 months.
Richard Hunter, head of markets at Interactive Investor, said: "In the absence of a cue from a closed Wall Street and with Asian markets drifting lower overnight, UK markets struggled for direction in muted early trade.
"US markets were closed for the Juneteenth holiday, leaving Asian investors to their own devices. The result was a dip in most major indices across the continent, with Chinese investors unable to muster much enthusiasm despite further interest rate cuts from the People’s Bank of China.
"Rates which affect corporate loans and the mortgage rate were cut, but had already been priced in by markets, where there was some disappointment that the reductions were not more aggressive. On top of the easing measures taken by the central bank over the last week, there is clear recognition that the Chinese economic rebound is struggling to maintain momentum, and a number of economists have also lowered their outlook for the region.
"A wider stimulus package is now seemingly required to rescue sentiment and boost economic growth, as the headwinds of high youth unemployment, an ailing property sector and an uncommitted consumer continue to weigh on markets across the region.
"The main UK markets took their lead from Asia and drifted in early exchanges. Domestically, the highlight and to some extent main concern of the week will be the Bank of England’s interest rate decision on Thursday, where another hike is widely expected."
In equity markets, Currys rallied after Frasers Group took an 8.9% stake in the electricals retailer. Frasers, which owns House of Fraser, Flannels and Sports Direct (LON:FRAS), among others, was also a high riser.
Online supermarket Ocado (LON:OCDO) was under the cosh after JPMorgan (NYSE:JPM) Cazenove cut its price target on the shares to 400p from 450p and placed the stock on ‘negative catalyst watch’ into first-half results. JPM said: "We believe Ocado’s online grocery activities will continue to face meaningful headwinds in the next months."
Outside the FTSE 350, Lookers surged more than 30% after agreeing to be bought by Toronto-based car dealership Alpha Auto Group in a £465.4m cash deal. The price represents a 35.3% premium to the closing share price on Monday.
Market Movers
FTSE 100 (UKX) 7,582.93 -0.07%
FTSE 250 (MCX) 18,825.60 -0.15%
techMARK (TASX) 4,555.82 0.02%
FTSE 100 - Risers
Frasers Group (FRAS) 722.50p 1.47%
Beazley (BEZ) 583.00p 1.39%
Endeavour Mining (EDV (LON:EDV)) 2,002.00p 0.81%
AstraZeneca (NASDAQ:AZN) 11,736.00p 0.77%
British American Tobacco (LON:BATS) 2,584.50p 0.54%
BAE Systems (LON:BAES) (BA.) 955.00p 0.48%
Diageo (LON:DGE) 3,319.50p 0.44%
National Grid (LON:NG.) 1,052.00p 0.43%
Rolls-Royce Holdings (LON:RR.) 154.45p 0.42%
Relx plc (REL) 2,622.00p 0.42%
FTSE 100 - Fallers
Ocado Group (OCDO) 421.20p -3.15%
Airtel Africa (AAF) 120.30p -2.59%
Sainsbury (J) (SBRY) 262.30p -1.28%
St James's Place (STJ) 1,099.00p -1.17%
BT Group (LON:BT.A) 133.80p -1.11%
Prudential (LON:PRU) 1,116.50p -1.11%
Burberry Group (LON:BRBY) 2,233.00p -1.06%
Melrose Industries (LON:MRON) (MRO) 505.60p -1.02%
Entain (LON:ENT) 1,225.00p -1.01%
Halma (HLMA) 2,255.00p -0.92%
FTSE 250 - Risers
Molten Ventures (GROW) 278.40p 4.98%
Renishaw (LON:RSW) 4,120.00p 3.05%
Currys (CURY) 54.40p 2.74%
Just Group (JUST) 83.00p 2.22%
Me Group International (MEGP) 162.80p 1.12%
Vanquis Banking Group 20 (VANQ) 196.00p 1.03%
NB Private Equity Partners Ltd. (NBPE) 1,574.00p 0.90%
Blackrock (NYSE:BLK) Throgmorton Trust (THRG) 615.00p 0.82%
Investec (INVP) 463.50p 0.80%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,135.00p 0.71%
FTSE 250 - Fallers
Petershill Partners (PHLL) 156.00p -4.06%
TP Icap Group (TCAP) 153.80p -2.35%
Digital 9 Infrastructure NPV (DGI9) 66.60p -2.20%
Jupiter Fund Management (JUP) 106.80p -2.20%
Genus (LON:GNS) 2,408.00p -1.79%
Babcock International Group (LON:BAB) 306.80p -1.48%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 592.70p -1.43%
Cranswick (LON:CWK) 3,204.00p -1.42%
TI Fluid Systems (TIFS) 128.00p -1.39%
Synthomer (LON:SYNTS) (SYNT) 79.00p -1.31%
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