By Danilo Masoni
MILAN (Reuters) - The UK's top share index eased on Thursday, weighed down by weaker financials and materials stocks, but strength in oil majors helped contain the losses.
The FTSE 100 (FTSE) was flat by 0846 GMT, while the midcaps (FTMC) index fell 0.2 percent.
UK stocks outperformed the broader European market, which was dragged into the red by worries that Italy's government could aim for a larger than expected budget deficit, while global equities suffered after the Federal Reserve affirmed plans for policy tightening.
Oil and gas stocks (FTNMX0530) led gainers as crude prices were pushed higher by the prospect of tighter markets due to U.S. sanctions against major oil exporter Iran.
"Unless the U.S. releases reserves or OPEC commits to further output to plug the gap, oil could continue to crank higher from here. Breaking out of multi-year highs leaves Brent facing little resistance on the upside," said Markets.com analyst Neil Wilson.
Oil majors BP (L:BP) and Shell (AS:RDSa) gave support to the FTSE, rising 1.1 and 0.6 percent respectively.
Airlines instead suffered from the strength in crude prices, with easyJet (L:EZJ) down 3.1 percent, further hit by a price target cut from Kepler Cheuvreux, while British Airways owner IAG (L:ICAG) and Ryanair (L:RYA) also declined.
Travel operator TUI (L:TUTI) was a bright spot, up 2.1 percent, after the company said it was on track to meet its forecasts for earnings growth, shrugging off the impact of a hot summer in its main customer markets.
TUI rival Thomas Cook (L:TCG), which cut its profit forecast this week blaming a heatwave in Europe, fell 0.2 percent.
"The nature of TUI’s tour operating business, which is less exposed to the late booking market where Thomas Cook suffered, and its greater exposure to the high growth and high margin cruise ship business have helped the former perform better," said Russ Mould, investment director at AJ Bell.
Miners were broadly lower as copper prices fell further, while banks tracked weakness among their European peers.
Mid-cap IG Group (L:IGG) was a stand-out faller, down 9.5 percent, after the online financial trading firm said its CEO Peter Hetherington would step down immediately.
Rival CMC Markets (L:CMCX) fell 1.9 percent. Both stocks have recently suffered sharp share price falls after weak results and amid tighter regulatory scrutiny.
Shares of Indivior (L:INDV) fell sharply for a second straight day, down 11 percent, as prospects for the British drugmaker's new potential blockbuster drug waned.