The FTSE closed slightly up at 6,721 points after recovering from a slide caused by a “Santa rout” on Wall Street and Donald Trump threatening a US government shutdown.
The blue chip index plunged to a fresh two-year low of 6,653 as President Donald Trump threatened a “very long” government shutdown over funding for his border wall.
But a late rally saw the index climb 100 points in the final 30 minutes of trading, closing 0.14 per cent up for the day.
The biggest faller was life insurer Prudential – with a 2.8 per cent drop followed by international sales and marketing group DCC, which fell 2.5 per cent over the day.
Building materials company CRH led the risers, climbing 3.3 per cent with Just Eat in second place with a three per cent rise.
The company was boosted after rival Takeaway.com struck a €930m (£838m) deal to buy larger rival Delivery Hero's activities in Germany.
The M&A activity in the sector increased investor appetite in Just Eat.
The mining sector performed well with Anglo American up 2.8 per cent, Antofagasta climbing 1.6 per cent and BHP and Rio Tinto also around 1.5 per cent higher.
All three major US indices, the Dow Jones, S&P 500 and the Nasdaq Composite dropped more than 1.5 per cent this afternoon, initially dragging the FTSE 100 with it before a late recovery.
“As the last full week of the year winds down, investors continue to sell into rallies,” IG analyst Chris Beauchamp said.
“Those assuming a Santa rally is now completely off the cards should be aware that the end of December remains a strong period, but we are now grasping at straws.
“Any rally in the next two weeks is at risk of heavy selling come January,” he added.