The FTSE 100 edged lower on Friday as the index saw a subdued end to a frantic trading week.
Sentiment across Europe and the US was calm after strong initial economic data for May from the monthly Flash PMI figures helped to offset concerns over inflation and the spread of the Indian variant of coronavirus.
London’s top flight closed 1.74 points lower, or 0.02%, at 7,018.05.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European stocks have continued to stabilise after a rollercoaster week which saw the FTSE 100 hit a one-week high and a six-day low in the space of 24 hours, while the Dax hit a record high at the start of the week before a round trip.
“In comparison, today’s price action has been more subdued as more positive economic data feeds into a narrative of optimism as looser restrictions prompt improvements in economic activity throughout April and May.
“Friday’s flash PMIs for May from Germany and France saw decent increases in the services components, while the UK numbers also pointed to a second quarter economic rebound that continues to gain traction.”
The other major European indices made gains as their PMI figures for the month nudged ahead of analyst forecasts
The German Dax increased by 0.44% and the French Cac moved 0.73% higher.
Across the Atlantic, the Dow Jones and S&P 500 ticked higher as inflation fears calmed and data showed a particularly strong rebound in the US service and manufacturing sectors.
Meanwhile, sterling continued its positive form over the week to move higher and near to a record for 2021 against the dollar.
The pound increased by 0.02% versus the US dollar to 1.418 and was up 0.03% against the euro at 1.162.
In company news, Novacyt, a major supplier of polymerase chain reaction (PCR) Covid-19 testing kits, saw shares plunge over a £150 million contract dispute with the Government.
Novacyt said in a statement to the stock market: “The company has taken legal advice in relation to the dispute and believes it has strong grounds to assert its contractual rights.”
Nevertheless, the issue shook investors and shares fell by 62.6p to 357p.
Waste and recycling specialist Biffa made gains after it bought the collections business and a number of recycling assets from rival Viridor Waste Management for £126 million.
Shares improved by 16.5p to 293.5p after shareholders welcomed the move, which is expected to complete by August at the earliest.
Elsewhere, Trainline dropped further as investors continued to be spooked by the Government’s plans for its own ticket-selling platform as part of an overhaul of the UK rail system.
It closed 14.2p lower at 314.4p at the end of trading.
The price of oil rebounded strongly on Friday but concerns over Iranian supply which had dogged the energy markets meant the commodity was still significantly down for the week.
The price of Brent crude increased by 2.66% to 66.86 dollars per barrel.
The biggest risers on the FTSE 100 were BT Group, up 5.05p at 175.9p, Flutter Entertainment, up 260p at 12,930p, Rolls-Royce, down 1.94p at 105.2p, and IAG, down 3.32p at 195.12p.
The biggest faller on the index were Kingfisher, down 16.3p at 357.9p, British Land, down 17.6p at 512.6p, Rightmove, down 12p at 589p, and Just Eat Takeaway, down 116p at 6,190p.