UK shares were flat on Monday, steadied by gains among mining stocks and banks, although house builders fell on worries about a slowdown in London’s high-end property market.
Shares in mining companies led the gainers, with Anglo American, Glencore and Rio Tinto all rising between 1.8 and 3.8 percent.
Analysts said comments from the Bank of Japan’s governor raising the prospect of further easing had fuelled risk-on sentiment.
“Now it feels like everyone’s looking towards the yen as a barometer for the state of play in terms of whether we’re risk-on (or) risk-off,” Joshua Mahony, market analyst at IG, said.
“This is a new dynamic that people are probably going to have to get used to.”
Banks Standard Chartered and Barclays were also higher, both up around 1.7 percent, with traders citing a meeting of Italian banks later in the day as supporting the sector.
The FTSE 100 index flat in percentage terms at 6,206.37 points by 08h37 GMT after initial falls, underperforming the broader European market.
House building stocks were among the top fallers on the FTSE 100 index, with Berkeley Group, Barratt Developments, Taylor Wimpey and Persimmon all down between 1.3 percent and 2 percent.
Investors cited concerns about UK economic growth and a slowdown in the London prime property market.
Shares in insurer Direct Line Insurance Group came under pressure, falling 1.6 percent, after investment bank Barclays downgraded their rating on the stock to “equal weight”.
“Direct Line has been one of the best performing insurance stocks since its 2012 IPO… However, we believe the stock is now fairly valued as we lower our estimates for the loss of its Nationwide and Sainsbury’s contracts,” analysts at Barclays said in a note.
A price target downgrade from BNP Paribas also hit the shares of retailer Next, which slipped 1.3 percent.