Britain's leading share index was 0.4 percent lower in early trade on Tuesday, weighed by weak commodity and banking stocks, which offset strength from food retailers after a solid update from Tesco.
By 0910 GMT, the FTSE 100 index was down 22.47 points at 5,515.60, having ended up 3.83 points, or 0.1 percent, on Monday.
"The FTSE is looking very flat and dull this morning, with nothing much to cheer it on either way. We had a stunning 2009, and a great first week to 2010 … but on a technical basis markets are looking more distorted than they have ever been before," said David Morrison, market strategist at GFT Global.
Energy stocks were the main drag on the FTSE 100 index early on, reversing some of the strong gains made on Monday as crude prices drifted back below $82 a barrel. Royal Dutch Shell, BP, Cairn Energy, and Tullow Oil lost 0.5 to 1.3 percent.
Oil services firms also retreated, with Petrofac and Amec falling 2 and 1.5 percent, respectively.
Miners were weak, extending Monday's late slide as metal prices weakened after disappointing fourth-quarter results overnight from U.S. aluminium firm Alcoa..
Vedanta Resources lost 2.2 percent, also weighed on by a Deutsche Bank downgrade to "hold" from "buy" in a sector review, while Fresnillo, Kazakhmys, Rio Tinto, BHP Billiton and Xstrata shed 0.5 to 2.8 percent.
Banks fell back on concerns over the U.S. fourth-quarter earnings season, kicked off by Alcoa, and with reports that President Obama is considering levying a tax on the sector, according to the New York Times.
Lloyds Banking Group, Royal Bank of Scotland, HSBC, Barclays , and Standard Chartered lost 0.5 to 1.8 percent.
TESCO TRIUMPHANT
Tesco was the main FTSE 100 riser as the world's fourth-biggest retailer smashed Christmas sales growth forecasts in its main British market, boosted by its loyalty scheme and demand for premium foods.
Tesco said sales at British stores open at least a year rose 4.9 percent, excluding gasoline, in the six weeks to Jan. 9.
Other food retailers found support, with WM. Morrison adding 0.9 percent, helped by a Nomura upgrade on Monday, while Sainsbury added 0.3 percent.
Other defensive issues were also in demand as investors' risk appetite faded, led by drugs firms and tobaccos, with GlaxoSmithKline up 0.7 percent and Imperial Tobacco ahead 0.5 percent, while mobile telecoms heavyweight Vodafone gained 0.8 percent.
Among individual blue-chip gainers, Pearson stood out, up 1.2 percent thanks to an upgrade in rating by Morgan Stanley to "overweight" from "equal-weight".
Domestic economic news issued overnight was mixed. British retail sales values rose 4.2 percent on a like-for-like basis in December, and 6 percent when new store space was included, in what the British Retail Consortium said on Tuesday was a better-than-expected Christmas.
And Britain's economy may have emerged from recession in the final three months of 2009, the British Chambers of Commerce said on Tuesday, though its latest survey showed it was a close-run thing, with the services sector still in decline.
But British house price growth slowed in December, with the Royal Institution of Chartered Surveyors' monthly house price balance falling for the first time since prices hit a low point in February.
Investors will watch trade balance data for November at 0930 GMT for other clues to the extent of how quickly the UK economy is recovering from recession.
