London - Weakness in energy and mining stocks outweighed strength in banks, bolstered by Lloyds Banking Group as its results failed to shock, with Britain's blue-chip index slightly weaker early on Wednesday.
By 10:08 the FTSE 100 was 8.25 points, or 0.2% lower at 4 663.21 after it closed 11.09 points, or 0.2% lower on Tuesday.
The blue chip index ended at its highest closing level on Monday since the collapse of Lehman Brothers late last year.
Lloyds sank to a £4bn loss in the first half of the year as it was hit by a surge in bad debts from the HBOS business.
But the bank's shares gained 5.3% as the results were not as bad as the average £5.1bn loss forecast by six analysts polled by Reuters.
"There was relief that the results were not worse, and in the absence of anything catastrophic or unexpected, it has lifted Lloyds and other banks," said Tim Hughes, head of sales trading at IG Index.
Barclays, HSBC, Standard Chartered, Royal Bank of Scotland added between 0.1% and 1.7%.
Economic data also gave investors cause for cautious optimism, further cementing a sense that the 34.6% gain since March for the British blue chip index is sustainable.
British consumer confidence edged up in July, driven in part by expectations of higher house prices and an end to the economic downturn, the Nationwide Building Society said in its monthly survey on Wednesday.
Optimism emerges
Nationwide's headline consumer confidence index rose to 60 from an upwardly revised 59 in June, after a small rise in consumers' optimism about the future outweighed falls in their confidence about the present situation and major spending.
Meanwhile, the annual rate of British shop price inflation eased in July to 0.5% year-on-year, down from 0.7% in June, helped by the weakest rise in food prices since December 2007 and falling prices elsewhere, the British Retail Consortium said on Wednesday.
Also hinting at a broader recovery, house prices in Britain rose a bigger-than-expected 1.1% in July, according to the Halifax.
"The equity markets have rallied on solid economic data and decent earnings but there's now a nervousness about what it would take to prompt a sell-off," Hughes at IG Index said.
Energy stocks and miners were weaker, with metal and crude oil prices pinned around levels seen the previous session.
BP, Royal Dutch Shell, BG Group and Cairn Energy fell between 0.4% and 2.2%.
Rio Tinto, Xstrata, Eurasian Natural Resources, Anglo American, Lonmin and BHP Billiton fell between 0.9% and 2.2%.
Investors will eye June UK industrial production and manufacturing production numbers, due at 10:30, together with the July UK services PMI reports for further clues as to the health of the domestic economy.
There will also be a big batch of US data to assess later in the session including June factory orders, a revision to June durable goods orders, the July ISM non-manufacturing index, and July's ADP employment survey.
Ex-dividend factors knocked 10.67 points off the blue chip index on Wednesday, with heavyweights such as AstraZeneca, Royal Dutch Shell, BG Group, and Reed Elsevier among the stocks losing their payout attractions.
-Reuters