The FTSE 100 Index edged back into positive territory yesterday despite weaker-than-expected official sales figures putting pressure on retailers.
Next, Argos owner Home Retail Group and B&Q firm Kingfisher all lost some ground after a surprise 0.6 per cent sales volume decline for May.
The wider Footsie languished in the red for much of the session but a strong start on Wall Street helped i
t rally back after upbeat economic news. The top flight eventually finished 2.40 points ahead at 4280.86.
With little in the way of corporate news to drive stocks, investors took their lead from US markets boosted by falling jobless claims and research signalling rising output in May.
The number of US workers filing new claims for jobless benefits rose last week but the number of people staying on the benefit rolls after collecting an initial week of aid fell for the first time since January, a government report showed.
Manufacturing in the US Mid-Atlantic area contracted in June for the ninth consecutive month but much less severely than expected and far less than in the previous month, a regional Federal Reserve survey showed.
Remarks from Bank of England governor Mervyn King that the UK economy may have stabilised, helped to steady nerves in London.
But the retail figures ensured a tricky session for many players in the sector, with Next off 34p to 1428p, and Home Retail Group 1p lighter at 2543/4p.
B&Q firm Kingfisher eased 13/4p to 1783/4p, while in the second tier Currys owner DSG International fell 11/2p to 221/2p and Comet firm Kesa Electricals lost 61/2p to 1073/4p.
There are fears in the City that May's figures mark the start of a prolonged slump in high street spending, given the rise in jobless numbers and continued high levels of personal debt.
Back in the top flight, the mining sector endured another difficult session after another bout of heavy falls on Wednesday, with Rio Tinto down 105p to 2049p and Kazakhmys off 8p to 6201/2p. Randgold Resources declined by 67p to 3929p. Lloyds Banking Group gained 21/4p to 691/4p to climb the risers' board after an upgrade from Macquarie.
Royal Bank of Scotland also added 1p to 38p despite the broker cutting its rating on the same bank.
The improvement came as RBS said it had come to an agreement with former chief executive Sir Fred Goodwin about a voluntary cut to his pension pot, which will see his payout reduced to £342,500 a year.
Chairman Sir Philip Hampton said that the resolution meant RBS could now focus all its efforts on getting the company back to health.
Among the supermarkets Sainsbury's recovered ground after heavy falls on Wednesday following its surprise fundraising, cheering 4p to 317p after a Merrill Lynch upgrade. Rival Morrisons was up 31/2p to 244p.
On the corporate front, Cadbury shares advanced by 3p to 525p after it said that it remained on course to meet revenues targets, helped by strong trading in the UK.
But elsewhere pubs group Marston's was down 16 per cent after it asked shareholders for £176m to fund the acquisition of new pubs. Shares were off 221/4p to 118p.
The four biggest Footsie risers of the day were Carnival up 105p to 1571p, Man Group ahead 111/4p to 2861/4p, Lloyds, and RSA Insurance ahead 33/8p to 1235/8p.
The biggest Footsie fallers were Rio Tinto, Rexam off 101/4p to 275p, Aviva down 103/4p to 3181/4p and Fresnillo off 171/2p to 551p.
