The FTSE 100 ended little changed after giving away most of its gains in late trade on Monday, in a sign investors lacked the confidence to sustain a recent rally in the absence of greater visibility on the euro zone crisis.
The FTSE 100 <.FTSE> closed up 4.81 points, or 0.1 percent, at 5,356.34 points, having stretched as high as 5,413.83 points in morning trade.
Traders said investors were happy to book their intra-day profits as uncertainty surrounding the euro zone, where concerns about Spanish banks sent local government bond yields jumping and the common currency slipping towards two-year lows, made it too risky to bet on a sustained market recovery.
"Most of the people on the buy side we spoke to are more bearish than bullish," Oliver Stansfield, director of equity sales at Fox-Davies Capital, said.
"They are also still concerned that volumes are going to remain fairly thin over the next few months, with the summer and the Olympics."
With Wall Street shut for Memorial Day, the FTSE had traded little over half of its 90-day volume average by the close.
Low volumes amplify share price volatility and, with fewer investors trading the market, also make it harder to get in and out of positions quickly.
Charts showed the FTSE had so far failed to validate a bullish trading pattern known as a "double bottom", where two lows of increasing height are formed.
"A support base has shaped around 5,254 and has allowed for a temporary stabilization" Nicolas Suiffet, a technical analyst at Trading Central, said.
Suiffet said a push above today's high of 5,413 would call for a "limited recovery" towards the index's recent high of 5,465 and the index's bearish 20-day moving average at 5,495.
"Alternatively, the breakout failure of today's high at 5,413 would reinstate a negative bias and would increase the risk of a break below 5,254 (last week bottom)," he added.
Adding most index points to the FTSE on Monday were mining stocks, boosted by hopes of more stimulus from China, the world's largest consumer of metals, on news Beijing was studying measures to stimulate its economy.
Rio Tinto , Antofagasta , Vedanta and Kazakhmys were all up between 1.5 percent and 2.2 percent.
Investors were looking for bargains in the sector as it offered the lowest valuation among its FTSE peers at 14.4 times its earnings for the next six months, versus a 16.4 multiple for the broader index, Thomson Reuters Starmine data showed.
Standing out in the low-volume trading environment was outsourcing specialist Capita , which rose 2.8 percent in volume nearly one and a half time the average, as UBS upgraded the stock to "buy" from "neutral", citing good earnings visibility thanks to U.K. government plan to outsource some services.
Tullow Oil also heaped analyst praises after announcing late on Friday its Ngamia well in Kenya appeared to have "intersected further oil-bearing sands", helping the shares rise 2.7 percent in volume 145 percent the average.
"The Ngamia well ... is continuing to come in well above expectations," Jefferies said in a note.
(Reporting By Francesco Canepa; editing by Ron Askew)