Profit taking and a lacklustre start to Wall Street added to the more subdued trading, with the Footsie closing up 18.29 points at 4171.25.

BHP Billiton's withdrawal of its bid for fellow miner Rio Tinto put the top tier on the back foot from early trade, dampening spirits after Monday's near 10 per cent rise – the biggest seen in the FTSE 100's 24-year history.

The news also sent Rio's shares tumbling 37 per cent, or 900p, to 1550p, while several other miners fell amid general profit-taking.

Lonmin and Antofagasta were off 16p to 8381/2p and 291/2p to 4011/4p respectively, with the sector accounting for many of the Footsie's top fallers.

But relief at BHP Billiton's withdrawal propelled the firm towards the top of the risers' board as it said the Rio tie-up now posed "unacceptable" risks to shareholders. BHP added 71p to 1051p, a rise of more than 7 per cent.

Banks also had a good session in the wake of recent shareholder approval for public and private bail-out plans.

Barclays – whose Middle East fundraising was approved on Monday – added 201/2p to 167p. Lloyds TSB, meanwhile, gained 131/4p to 1607/8p and Royal Bank of Scotland rose 23/4p to 535/8p.

Asian-facing Standard Chartered, which announced plans to raise £1.8bn on Monday, was the best performer on the FTSE 100 despite Credit Suisse cutting its target price on the bank. Standard added 115p to 840p, or 16 per cent. But telecoms giant BT was heading the other way after Merrill Lynch downgraded the firm, warning that it was vulnerable to slowing corporate and consumer spending. Shares declined by 43/4p to 1301/2p. Lambert & Butler and Davidoff maker Imperial Tobacco was also on the fallers' board despite posting a 30 per cent rise in annual underlying pre-tax profits to £1.6bn.

Shares fell 107p to 1470p.

In other corporate news, Durex and Scholl firm SSL International rose 3 per cent, or 131/2p, to 4341/4p after half-year profits jumped 46 per cent.

Shares in Clinton Cards were under pressure after the greetings card retailer reported a deterioration in sales at its Clinton business. Shares fell by as much as 20 per cent before recovering to show a 9 per cent decline, off a penny at 101/2p.

H Samuel and Ernest Jones jeweller Signet also shed 14p to 555p as the retailer reported a loss before tax of £15.7bn in the third quarter. The firm said that UK sales in the last three weeks of the quarter had fallen by 8 per cent in "very challenging" conditions.

Severn Trent climbed 18p higher to 1222p after profits rose by 4.4 per cent in its water and sewerage division after higher prices offset a decline in consumption among metered customers.

The biggest Footsie risers were Standard Chartered, Barclays, Icap advanced 291/2p to 290p while Schroders finished the day 62p higher at 721p.

The biggest Footsie fallers were Rio Tinto, Friends Provident was off 71/4p at 69p, Centrica slipped 193/4p to 2541/4p, and Antofagasta.