Britain's blue chip index ended unchanged on Thursday as near-record crude prices boosted commodity shares but economic and rights issue concerns dragged banks lower. During a thin trading session, the FTSE 100 ended down 1.5 points or 0.02 percent at 6,068.1, after earlier hitting a high of 6,130.5.
The UK's main share index has now lost 6 percent this year. BP, Cairn Energy and Royal Dutch Shell led the advance, up 1.2 to 3.1 percent as US oil prices rose above $130 a barrel, although analysts cautioned that a decline may be imminent as demand falls.
Crude slipped to below $129 a barrel towards the end of UK stock market trading hours. Miners were mixed after Rio Tinto predicted seven years of near-double-digit percentage annual production growth, as it argued its case for rejecting a $178 billion take-over bid from rival BHP Billiton.
Rio Tinto added 0.7 percent, BHP Billiton was flat, while ENRC was up 5 percent. Metal prices fell. "Once again the sheer weighting of the commodity stocks in the FTSE is dragging the index up," said Ryan Kneale, market analyst at BetsForTraders.com.
"Miners rise on increased bid speculation and a positive outlook from Rio Tinto and oil giants BP and Shell have gained as oil prices remain within touching distance of their recent highs." On the downside, Royal Bank of Scotland (RBS) led banks down as the sector knocked almost 12 points off the FTSE 100.
RBS shares dipped 2.6 percent, at one point touching an eight-year low in heavy trading volumes as traders cited concerns that its planned rights issue may be incurring problems. The British bank declined to comment. Peers HBOS and Bradford & Bingley, which have both recently announced rights issues, lost 3.9 to 6.9 percent.
"The oils have driven (the market) forward again and as have the miners to a lesser extent ... But we have been held back by the banks and RBS has ranged quite wildly ... as the rights issues come to a conclusion," said Dave Wathen at brokerage Redmayne-Bentley.
Also pulling banks south, the Nationwide Building Society said British house prices fell a record 2.5 percent in May, raising fears the property market downturn could soon turn into a crash that hits the whole economy. The data dragged down UK property stocks and housebuilders, with Persimmon, Wolseley, Hammerson, British Land, Taylor Wimpey, Bovis Homes and Land Securities 1.4 to 8.6 percent lower.
By contrast MAN Group, the world's biggest listed hedge fund, added 5.2 percent after posting a 60 percent improvement in annual profit. The group also said funds under management are growing strongly despite uncertain financial markets.
Among other individual shares, power supplier Scottish & Southern Energy added 1 percent after posting full-year profits in line with market expectations, and said that it has no intention of raising prices. On the macro front, data showed the US economy grew at a revised 0.9 percent annual rate in the first quarter, slightly better than previously thought because of lower demand for foreign goods and services and a pickup in non-residential building.
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