FTSE treads water as profit-taking and debt deal fears weigh

UK stocks were muted mid-morning as investors took profits and fretted once more over the outlook for Europe and the Greek debt deal.

The FTSE 100 dropped 0.1% or 6 points, to 5,789 points by 10:14am, with the index impacted by BP which fell after the latest twist in its Gulf of Mexico court case.

The oil giant was ordered by a US court to indemnify US oil services company Transocean for some of the compensatory damage claims following the 2010 Deepwater Horizon tragedy.

As a result, shares were off 1.6% to 469.05p, making it one of the worst performers on the day.

Renewed fears over Greece also weighed on market sentiment. Investor attention has been locked on Athens' debt swap talks with private creditors this week, with the main sticking point the extent to which Greece's EU partners participate in the agreement and the level of ‘hair-cut' agreed to by private creditors.

As the talks continued, European markets were mixed, with the German Dax - which closed at a multi-month high yesterday - reversing early losses to climb 31 points, to 6,570 points, while the French Cac 40 slipped 0.6% to 3,362 points.

The mixed picture today follows a positive spell for markets, with investors boosted Thursday by the US Federal Reserve's accommodative stance on interest rates.

The Fed said this week rates are not poised to rise until late 2014.