LONDON'S top flight index struggled to remain in positive territory as banking stocks fell out of favour following a 2.5 billion euro (£1.9 billion) rights issue at Spain's Banco Popular.
The Spanish lender dragged heavy-weight financial stocks into the red after it pencilled in a capital increase to help it cope with toxic real estate assets.
The FTSE 100 Index was 2.8 points higher at 6265.7 despite the slump from the banks, with Royal Bank of Scotland falling 7.4p to 248.6p, Lloyds Banking Group slipping 0.9p to 72.8p and Standard Chartered 5.4p lower at 549.2p.
Commodity stocks surged higher as oil prices bounced back above 50 US dollars a barrel for the first time in nearly seven months.
Benchmark Brent crude rose 1% to 50.22 US dollars at one stage following supply disruptions and an increase in global demand, before falling back to 49.93 US dollars a barrel.
Crude is now 80% higher than its low of under 28 US dollars a barrel seen at the start of the year.
A global supply glut had caused a lengthy oil price rout, which in turn sent financial markets into turmoil.
But supply disruptions following fires in Canada, as well as recent talks between Opec and Russia about freezing production, have helped the cost of crude recover.
Across Europe, Germany's Dax and the Cac 40 in France were both 0.7% higher.
Sterling was down 0.2% against the US dollar at 1.467, as official figures confirmed UK economic growth slowed to 0.4% in the first quarter from 0.6% in the previous three months, but showed annual growth was weaker than previously estimated, at 2% against the 2.1% initially recorded.
The pound was also down 0.5% against the euro at 1.311.
Among stocks, mining giants Glencore and BHP Billiton were up 2.5p to 135.9p and 14.6p to 851.8p respectively.
Department store chain Debenhams was marginally up in the FTSE 250, ahead 0.05p to 73.7p after naming Amazon Fashion boss Sergio Bucher as its new chief executive.
Mr Bucher will join in October from Amazon, where he has acted as vice president of its fashion arm in Europe since 2013.
Still in the retail sector, top tier rival Marks & Spencer remained in the red following Wednesday's 10% slump after it said profits would be hit from efforts to overhaul its beleaguered clothing business.
Shares were down another 8.8p to 390.6p after it suffered broker downgrades, including a cut to under perform from Jefferies.
Daily Mail & General Trust was down more than 10% or 80.5p to 664p after posting an 11% drop in interim profits to £129 million following a slump in advertising and circulation.
However, Pets at Home raced ahead, up nearly 5% or 12.3p to 161.6p, as the firm reported a rise in full year sales and profits.
The retailer said pre-tax profits rose 3.7% to £90.2 million and revenues were up 6.7% to £777.8 million in the year to March, adding that it will open 20 new Pets at Home superstores in the next 12 months.
The biggest FTSE 100 risers were Intu Properties up 6p to 304.1p, 3I Group up 10.5p to 543p, Glencore up 2.5p to 135.9p, Sainsbury up 4.7p to 267.6p.
The biggest fallers were Carnival down 110p to 3379p, Royal Bank of Scotland down 7.4p to 248.6p, Whitbread down 114p to 4242p, DCC Plc down 165p to 6345p.
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