Britain's blue-chip index recorded its first weekly gain in a month on Friday but its recent rally lost momentum and the index closed flat on the day, capped by uncertainty about the euro zone crisis and an economic slowdown in China.

The FTSE 100 <.FTSE> ended up 1.48 points at 5,351.53 after a choppy trading session, with share price moves exacerbated by light volume at just 75 percent of its 90-day average.

The index was up on the week after rebounding from a six-month low of 5,253.92 hit on Monday, helped by hopes that Europe was taking new measures to tackle its debt and economic crisis.

But the escalating banking and debt crisis in Spain, polls showing that an anti-austerity party may win the Greek elections and lack of cohesion among European leaders pushed investors to offload their holdings of banking stocks, which fell 0.9 percent on Friday <.FTNMX8350>.

Miners and industrial metals stocks also dropped as the market was frustrated at the lack of decisive policy response in the world's largest metal consumer, China, which warned on Friday it was facing a stern trade environment <.FTNMX1770> <.FTNMX1750>.

"The movements in the banks would indicate investors have no confidence in Europe," said Gerard Lane, investment strategist at Shore Capital.

"As for the miners they're increasingly worried about the China slowdown that doesn't appear to be producing any policy response, which in fairness is a surprise."

In this context, Lane recommended that investors position themselves in defensive stocks such as mobile operator Vodafone , up 0.8 percent on Friday, and cash-rich utilities.

United Utilities and National Grid both closed up 1.9 percent on Friday.

Lane also tipped stocks exposed to the British consumer, who was set to benefit from lower inflation and fuel prices in particular, as well as better weather, highlighting retailer Mark & Spencer , up 1.3 percent on Friday.

BARGAIN HUNTING

Despite the recent rebound, the FTSE was trading at 9.43 times its expected earnings for the next 12 months, a historically low level that compares with an average 13.19 multiple since 1988, Datastream data showed.

Some short-term investors were taking advantage of the battered valuations to bet on a brief rebound in the run-up to the Greek elections.

"Certain sectors and markets are incredibly oversold," Andy Ash, head of sales at Monument Securities, said.

"While there is no newsflow (until Greek elections next month), these could have a gentle rally, unwinding what has been quite a violent move, and then we'll sell them again."

The up-move could be worth "a couple of hundred points" on the FTSE, added Ash, who highlighted miners as a sector that had become attractive.

Mining shares were the cheapest sector on the FTSE 100 index, trading at 14.4 times their expected earnings for the next 12 months, compared to a 16.4 multiple for the blue-chip benchmark as a whole, Thomson Reuters Starmine data showed.

The FTSE 350 Mining index, which tends to swing in tandem with macroeconomic sentiment, revisited seven-month closing lows of 17,004 points on Friday, before ending down 1.5 percent on the day at 17,024.53 points.

(Editing by Tim Pearce)