Worries over a relapse in the eurozone economy held back progress on the London market and overshadowed more upbeat figures on Britain's recovery.

A bounce back on Wall Street helped the FTSE 100 Index inch into positive territory for the close - up 0.3 points at 6681.3 - as the Dow Jones Industrial Average rose 0.6% in early trading following falls on Wednesday amid concerns that the US Federal Reserve plans to taper its massive asset buying programme within months.

But trading in London was hampered after Markit's gauge of European business activity showed a surprise fall to a three-month low, fuelling worries that the recovery in the 17-country eurozone is losing steam. Earlier disappointing manufacturing figures from China added to the downbeat mood. The eurozone gloom contrasted with better prospects in the UK after the CBI reported the best manufacturing growth in 18 years. This gave a boost to the pound, which rose 0.3% to $1.62 and 0.1% to €1.20.

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There were also encouraging signs on the corporate front after well-received results from Johnson Matthey and defence products firm Qinetiq.

Speciality chemicals company Johnson Matthey was the biggest riser in the top flight after it posted a 12% rise in half-year profits to £202.1 million. The company is seeing a pick-up in demand for emission control technology as global car and truck production gathers pace.

Shares were 4% or 116p higher at 3210p as Johnson increased its half-year dividend by 10% and said trading had been better-than-expected.

The fallers board reflected the economic uncertainty in Europe and China, with commodity-based stocks such as Vedanta Resources under pressure, down 28p to 923p.

Other fallers in London included Imperial Tobacco, which declined 63p to 2367p.

Outside the top flight, shares in Qinetiq surged 7% after it moved to offset fears about US defence cutbacks by maintaining its full-year guidance.

The former MoD research arm, which was privatised in 2006, underlined its confidence by raising its half-year dividend.

Profits were lower at £72.6m, but shares rose 14.3p to 211p.

Meanwhile, shares in retailer French Connection endured a mixed session.

It said revenues in its UK and Europe retail business were 2.1% higher on a like-for-like basis, driven by an encouraging response to its autumn range. Shares were 4% higher at one stage but later retreated to stand 1p lower at 39p.

Joining Johnson Matthey among the biggest FTSE 100 risers were Persimmon - ahead 34p to 1197p, AstraZeneca 92p higher at 3400.5p and easyJet 36p stronger at 1413p.

The biggest fallers were Fresnillo down 41p to 863.5p, Vedanta Resources, Randgold Resources and Imperial Tobacco 63p weaker at 2367p.