London's top-flight index drifted lower on Tuesday as investor concerns over geopolitical risks dragged on the market.
The FTSE 100 Index was down 15.55 points to 7,285.74, as traders remained cautious about the political standoff between the US and North Korea, the German election and tensions in Spain over the Catalonian independence referendum.
European markets delivered a brighter performance, but trading was thin, with Germany's Dax and the Cac 40 in France recording marginal gains.
On the currency markets, the pound was down 0.3% against the US dollar at 1.34, as sterling suffered in the wake of comments from former Bank of England Monetary Policy Committee (MPC) member David Blanchflower, who said there was "absolutely no basis" for an increase in interest rates given weak readings on the economy.
However, sterling was 0.3% ahead versus the euro at 1.14 after single-bloc currency took a hit following the outcome of the Germany's general election.
Sunday's election left Chancellor Angela Merkel's conservative bloc weakened but still easily the biggest group in parliament.
Mrs Merkel now faces a complicated task in forming a coalition, most likely with the pro-business Free Democrats and the traditionally left-leaning Greens.
Her partners in the outgoing government, the centre-left Social Democrats, say they will go into opposition after they lost substantial support in the vote.
In oil, Brent crude was down 1.4% at $58.26 per barrel, as it fell back from a 26-month high with investors taking profits.
Focusing on UK stocks, easyJet was among the biggest risers on the top tier after UBS analysts said the budget airline was likely to benefit from Ryanair's staffing woes.
Shares closed up 1.6%, or 19p to 1,199p.
On the second tier, travel giant Thomas Cook was suffering after saying it had dealt with an "operationally challenging" past month as it provided support and took care of 22,000 of its customers in destinations impacted by devastating Hurricane Irma.
The group said it was forced to evacuate thousands of customers in the Cayos in Cuba, which were the group's worst hit resorts, while it also had 10,000 customers in Florida and 4,500 in the Dominican Republic.
Around 15,500 of the customers affected were from the UK, it said.
Shares were off 3.6p at 117.4p.
Card Factory was the biggest faller on the FTSE 250 after the retailer reported a sharp fall in half-year profits.
Shares dropped 18%, or 65p to 290p, as the group booked a 14.1% decline in pre-tax profit to £23.2 million in the six months to July 31, as the Brexit-induced collapse in the pound, national living wage costs and "important investments" took their toll.
Card Factory joined other retailers in pointing out that costs have rocketed since the referendum, when sterling tanked against all major currencies including the dollar.
Boss Karen Hubbard warned that full-year profit could also take a hit.
She said: "The board is confident that the group will continue to make further strategic progress, although notes that the full-year profit out-turn will reflect a continuation of some of the headwinds identified in the first half."
The biggest risers on the FTSE 100 Index were NMC Health up 73p to 2,718p, Carnival up 127p to 4,865p, easyJet up 19p to 1,199p and Imperial Brands up 48.5p to 3,274.5p.
The biggest fallers were Shire down 90.5p to 3,741.5p, WPP down 24p to 1,399p, TUI down 20p to 1,284p and GKN down 5.3p to 341.9p.
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