Prudential’s 1.5% rise in early trading, following better than expected first-half profits, helped the FTSE edge 0.3% higher to 5257.79 points.
However, the rise only claws back a fraction of the index's 2.4% loss yesterday - the sharpest since May - after the Bank of England said the UK's economic outlook was uncertain, and signs of US slowdown were "obviously not good news".
The Pru climbed to 570.5p after reporting a 41% rise in first-half operating profits, and lowering the costs of its failed bid for AIA to £377m. It also boosted its dividend by 5% to 6.16p per share.
Other risers include Rolls Royce which climbed 1.6% to 561p. Rumours Vedanta Resources is discussing buying assets or taking a large stake in Cairn Energy sent the latter to the top of the leader board, up 3.4% at 460.1p. However, Vedanta fell 1.6% to £23.19.
Elsewhere, two analyst notes on financials brought prominent blue chips lower.
Morgan Stanley cut its forecast for 2010 earnings per share at Barclays by 16%, due to higher staff costs, sending its shares down 1.5% to 309p.
Meanwhile, Goldman Sachs' decision to recategorise Old Mutual shares to 'neutral' from 'buy', after the insurer agreed terms to sell its US life operations, pushed its shares down 2.1% to 120.5p. Investec also fell, by 1% to 460p.
The FTSE's rise compared well to the Dow Jones' 2.5% slump overnight to 10,378.83 points, and the Nasdaq's 3% fall, on news America's June trade deficit hit its highest level since October.
The S&P 500's 2.8% plunge pulled it below 1,100 for the first time since 22 July.
US industrials and energy stocks fared worst on the news, with 3M closing down 3.5% at $84.10.
Retailer Macy's stood out with a 6% gain to $20.55, after boosting its outlook for profits.
In Asia, Japan's Nikkei 225 was 0.9% lower, while the Hang Seng fell 1.4%.
