Strong gains for financial stocks were being outweighed by heavy losses in the resources sector in London, with markets trading mixed ahead of a busy day in the US later on.
"European markets are looking exhausted, broadly flat as traders continue to refrain from building equity positions after the recent strength in equity markets on both sides of the Atlantic and in anticipation of more economic data in the hours of ahead," said market strategist Ishaq Siddiqi from ETX Capital.
"Earnings have been mixed at best from Europe, adding to the downside pressure which sees the region's indices flipping between small gains and losses."
The preliminary estimate for fourth-quarter gross domestic product growth in the US is due out at 13:30 (London time), with analysts expecting the economy to have grown at an annualised rate of 1.1% in the final three months of 2012, well below the 3.1% growth in the third quarter.
Meanwhile, the Federal Open Market Committee (FOMC) will reveal its policy decision at 19:15 after a two-day meeting in Washington. While traders will keep a close eye on the announcement, analysts have labelled this as the most anticipated "non-event" of the week. While the economy continues to slug along, the improvements seen in recent data are thought to be insufficient to force the Fed to move its hand.
As such, the central bank is expected to continue with its stimulus measures but everyone will be looking out for comments on when the current third round of quantitative easing (QE) will end. Most expect the Fed to continue through with QE3 until the end of the year, if not early 2014.
Providing some support to markets this morning was last night's news that the Chinese Academy of Social Sciences had raised its forecasts for economic growth this year. The think-tank now expects the Chinese economy to grow at a 8.4% rate in 2013, above the initial 8.2% estimate.
FTSE 100: Petrofac hit by earnings fears
Oilfield services group Petrofac was suffering heavy losses this morning as Europe's energy engineering majors dropped over fears that industry earnings would be lower than expected. The industry-wide drop began after Saipem SpA, Europe's largest energy engineering firm, cut its profit forecast. The news hit Paris-based Technip SA, while Subsea 7 led Norway's oil services sector down.
Mining stocks were generally out of favour this morning: Antofagasta was a heavy faller as traders shrugged off strong production results in the fourth quarter and focused on comments made about higher copper product costs. Sector peer Polymetal was also lower even though it topped production guidance in 2012.
Leading the upside was advertising and media firm WPP after Jefferies upgraded its rating for the stock from 'hold' to 'buy'. The broker said that an analysis WPP's largest clients and their 2013 ad budgets "looks encouraging" and "with expectations low, we see upside risk".
Meanwhile, heavyweight financial stocks such as RSA Insurance, Prudential and RBS were making gains this morning.
Tobacco giant Imperial registered sharp falls after saying that its Finance Director is to retire. The company also revealed that operating profits would fall in the first half as "market trends have worsened in a number of key markets including in the EU and Russia."
Oil group BP was higher after a US court accepted an agreement to plead guilty for its role in the Deepwater Horizone explosion and oil spill in 2010. Water group United Utilities was also in demand despite saying that revenue increased at a rate "slightly below the slowed regulated price rise for 2012/13".
Chemicals group Johnson Matthey was in the red after saying that both sales and profits fell in the third quarter. The firm said that volumes in the Precious Metals division had been hit by Amplats' plan to close mines in South Africa.
FTSE 250: Renishaw sinks after first-half results
Precision tool maker Renishaw fell despite reporting a sharp increase in first-half earnings as it was boosted by a string of large consumer electronics orders in China. However, the company cautioned it faces tough financial comparators in the second half.
Titanium feedstock miner Kenmare Resources rose after saying that revenue rose 40% in 2012.
Chip designer Imagination Tech was a high riser after Morgan Stanley upgraded the stock to 'overweight'.
FTSE 100 - Risers
WPP (WPP) 1,004.00p +2.71%
Prudential (PRU) 971.50p +1.67%
RSA Insurance Group (RSA) 133.80p +1.67%
Sage Group (SGE) 330.40p +1.66%
Bunzl (BNZL) 1,122.00p +1.45%
Associated British Foods (ABF) 1,758.00p +1.33%
ARM Holdings (ARM) 880.50p +1.27%
Royal Bank of Scotland Group (RBS) 350.10p +1.24%
Weir Group (WEIR) 2,036.00p +1.19%
BP (BP.) 480.85p +1.09%
FTSE 100 - Fallers
Antofagasta (ANTO) 1,173.00p -8.00%
Petrofac Ltd. (PFC) 1,637.00p -5.76%
Johnson Matthey (JMAT) 2,280.00p -5.32%
Imperial Tobacco Group (IMT) 2,346.00p -4.87%
Kazakhmys (KAZ) 731.50p -4.57%
Aggreko (AGK) 1,645.00p -3.29%
Polymetal International (POLY) 1,084.00p -2.34%
Wood Group (John) (WG.) 808.00p -1.88%
G4S (GFS) 275.00p -1.75%
Lloyds Banking Group (LLOY) 51.28p -1.25%
FTSE 250 - Risers
Imagination Technologies Group (IMG) 481.30p +9.01%
Phoenix Group Holdings (DI) (PHNX) 643.00p +8.80%
Oxford Instruments (OXIG) 1,630.00p +2.39%
Wetherspoon (J.D.) (JDW) 522.00p +2.35%
Inmarsat (ISAT) 647.00p +1.89%
Galliford Try (GFRD) 834.50p +1.77%
COLT Group SA (COLT) 105.00p +1.55%
3i Group (III) 270.30p +1.31%
Moneysupermarket.com Group (MONY) 185.30p +1.31%
William Hill (WMH) 378.90p +1.31%
FTSE 250 - Fallers
Fenner (FENR) 392.10p -5.06%
Ferrexpo (FXPO) 259.40p -4.60%
IP Group (IPO) 125.40p -4.49%
Renishaw (RSW) 1,872.00p -4.49%
Kier Group (KIE) 1,345.00p -3.93%
FirstGroup (FGP) 192.30p -3.80%
Enterprise Inns (ETI) 97.15p -3.04%
Mitchells & Butlers (MAB) 295.50p -2.92%
Chemring Group (CHG) 281.90p -2.76%
Devro (DVO) 337.40p -2.68%