Europe’s main markets dipped into the red at the close of play as tobacco stocks slipped after US regulators proposed a ban on menthol cigarettes.
Shares in British American Tobacco (BAT) and Imperial dropped lower after the announcement, although the prices were already down for the week after earlier reports suggesting the ban was on the cards.
It came as positive early trading cooled, with London’s main markets falling back from gains in the afternoon.
The FTSE 100 closed 2.19 points lower, or 0.03%, at 6,961.48 on Thursday.
In mainland Europe, German stocks were the biggest losers while the French Cac finished just lower having reached a 20-year high earlier in the day.
The German Dax decreased by 0.9% and the French Cac moved 0.07% lower.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets had for the most part of today seen a broadly positive session. However, these gains seemed to be evaporating as we head into the close, with the Dax taking the brunt.
“The FTSE 100, on the other hand, briefly moved back above 7,000, hitting its highest level since April, before it too started to slip back.
“Today’s big gainers have been financials, with Asia-focused Standard Chartered leading the way higher.”
In the US, the S&P 500 pushed through 4,200 to reach a new record high as trading was buoyed by New York planning a full reopening on July 1.
Meanwhile, sterling pushed higher as the dollar slipped to a two-month low.
The pound increased by 0.07% versus the US dollar to 1.394 and was up 0.14% against the euro at 1.151.
In company news, NatWest shares dropped despite the bank delivering an 82% surge in first-quarter profits.
The firm tempered sentiment as it decided to hold its outlook for the full year amid caution over ongoing economic uncertainty, with Covid-19 business loans becoming due for repayment.
It saw shares fall by 6.85p to 196.65p at the close of trading.
BT shares improved after the telecoms firm confirmed reports that it is in talks with several rivals over the potential sale of BT Sport.
BT did not confirm which firms it is talking to and said talks are at an early stage but stoked investor hopes that a disposal could raise funds for the business. It closed 3.95p higher at 163.8p.
Medical equipment specialist Smith & Nephew soared after it resumed its full-year trading guidance and unveiled a revenue increase for the first quarter.
The company saw shares rise 83p to 1,568p after it reported the 12% revenue increase.
The price of oil broke its one-month highs on optimism over the economic recovery, setting aside concerns over infection rates in India and Turkey.
The price of Brent crude oil increased by 1.31% to 68.15 dollars per barrel.
The biggest risers on the FTSE 100 were Standard Chartered, up 27.8p at 521.6p, Smith & Nephew, up 83p at 1,568p, Unilever, up 135.5p at 4,213p, and Hargreaves Lansdown, up 41p at 1,667.5p.
The biggest fallers on the FTSE 100 were NatWest, down 6.85p to 196.65p, Relx, down 53.5p at 1,874p, Flutter, down 435p at 15,335p, and Fresnillo, down 19.8p at 830.4p.