The FTSE was marginally down by 0.04% to 5186.60, despite strong gains by utilities in early trading.
A rally was sparked in the sector by speculation the Ontario Teachers' Pension Plan is planning a bid for Northumbrian Water Group. Northumbrian Water surged 12% after the Sunday Times reported it may be the subject of a £1.7bn bid.
Severn Trent was up 3.82% to 1168p and United Utilities Group climbed 3.45% to 555p on the back of the news, despite both firms being downgraded by one notch by S&P following their acceptance of Ofwat's five year regulatory review and a reduction in dividend policies. Both are now rated BBB+ by S&P with a stable outlook.
Ryanair Holdings Plc gained 5.2% after Europe's largest discount airline raised its profit forecast. Rolls-Royce Group also performed well, up 1.88% to 488.80p
Schroders led the losers falling 1.28% to 1230p, while Schroders NV was down 1.55% to 981.50p and Royal Bank of Scotland 1.39% lower at 31.85p a share.
The Dow Jones finished down 53 points at 10,067as optimism over strong GDP figures for the fourth quarter of 2009 was overshadowed by tech companies' caution on the year ahead.
Microsoft reported a 60% rise in profits late last night, but chief financial officer Peter Klein said the firm has not seen any recovery in business software. SanDisk moved into profit in the fourth quarter but was cautious on 2010 prospects.
Japan's Nikkei 225 closed down 216 points at 10,198 on Friday, a slump of more than 2% and six-week low on the back of weak earnings and strong yen demand for equities.
Advantest Corp, the world's biggest manufacturer of memory-chip testers, plummeted almost 9%, while the strength of the yen hurt exporters including Sony, Nissan, Canon and Honda.
