But investor confidence was knocked after respected thinktank, the Organisation for Economic Co-operation and Development (OECD), cut its growth forecasts for the UK and warned eurozone woes and a failure to prevent America's co-called fiscal cliff could trigger a global recession.
Early session falls on the Dow Jones Industrial Average in the US pared back gains on the FTSE 100 Index, which closed 13 points ahead at 5799.7.
The FTSE 100 had been more than 30 points higher at one stage after the crucial eurozone deal was struck late yesterday, which will see Greek debt cut by 40 billion euros (£32 billion), paving the way for around 44 billion euros (£36 billion) of bail out cash to be released.
Despite the gloomy forecast from the OECD, there was some reassuring news for the UK economy after the Office for National Statistics kept its estimate for 1% growth in the third quarter unchanged.
This helped the pound rise to nearly 1.24 euros, although sterling slipped to 1.60 US dollars.
Banks were among those receiving a boost following declines across the sector yesterday, with part-nationalised Royal Bank of Scotland the top FTSE 100 riser as it also benefited from a broker upgrade.
UBS said RBS was its preferred bank stock and added the appointment of Mark Carney as Bank of England Governor could herald a more balanced approach to bank regulation.
RBS shares rose 4% or 10p to 295.1p.
Barclays, which topped the fallers board yesterday, made up some lost ground as it rose 3.2p to 243.7p, while Lloyds Banking Group made a 3% gain, up 1.3p to 46.4p.
Defence giant BAE Systems saw shares rise sharply, ahead 7.7p to 319.7p amid vague rumours of bid interest from US group Lockheed Martin.
Water group Severn Trent was down 2p to 1554p as it said interim underlying pre-tax profits dipped 1.4% to £269.1 million.
In the FTSE 250, Mitchells and Butlers' focus on the eating out market helped it report a 2.1% increase in like-for-like sales for the year ending September 22, boosting annual pre-tax profits by 4% to £162 million.
But its share price fell 18.9p to 312.1p after it revealed like-for-like sales in the eight weeks since its year end were down year-on-year, while investors also moved to take profits after a recent strong run.
Shares in wood and tile flooring specialist Topps Tiles rose 0.25p to 47.25p as the group said it had seen its first rise in total sales since 2007 in the year to September 29 after a second half rebound.
But underlying pre-tax profits slipped 8% to £12.8 million and it said sales growth had slowed to 1% in the first seven weeks of the new financial year.
The biggest FTSE 100 risers were Royal bank of Scotland up 10p to 295.1p, Capita ahead 23p to 751p, Lloyds Banking Group 1.3p higher at 46.4p and BAE Systems up 7.7p to 319.7p.
The biggest FTSE 100 fallers were Aberdeen Asset Management down 7.4p to 328.6p, Pearson off 16p to 1168p, Johnson Matthey 27p lower at 2269p and BG group down 11.5p to 1060p.