The FTSE 100 Index has risen 2.1 points, or less than 0.1%, to 5597.50 in the first hour of trading after the Christmas break.
UK stocks including AstraZeneca have advanced after the drugmaker announced plans to develop a treatment for Alzheimer's and schizophrenia. BP has declined on falling crude-oil futures.
AstraZeneca, the UK's second-largest drugmaker, has climbed 36p, or 1.3%, to 283.1p. The company says it has agreed to pay Turgescent as much as $300m over four years to help develop TC-1734, an experimental treatment.
BP, Europe's biggest oil company, has fallen 10p, or 1.6%, to 611.5p while Royal Dutch Shell, the region's second- largest energy producer, has also lost 20p, or 1.1%, to 1,754p.
Crude oil for February delivery has fallen as much 0.7% to $57.77 a barrel on the New York Mercantile Exchange amid speculation fuel consumption will decline as forecasters predict warmer weather in the US.
BT, Britain's biggest telephone company, has dropped 3p, or 1.3%, to 221.75p. The shares are trading without the right to the first-half dividend of 4.3p.
Cadbury Schweppes, has climbed 7p, or 1.3%, to 549.5p. The company says this morning it has agreed to sell its Holland House brand of cooking wines to closely held Mizkan Americas. for $37m.
EMI Group, the world's third-largest music company, has fallen 5p, or 2.1%, to 239p, after the New York Attorney General Eliot Spitzer began an investigation of digital-music pricing as record companies turn to the Web to make up for declining sales of compact discs, yesterday.
Meanwhile, Japan's Nikkei 225 Stock Average rose to its highest position in more than five years, jumping 1.4% to 16,194.61 at its close a short time ago.
Taiyo Yuden, an electronic component maker, jumped 8.6% to 1,712 yen. Murata Manufacturing, the world's biggest maker of ceramic parts for electronic gadgets, gained 3.6% to 7,500 yen.
Sony also jumped 3.5% to 4,770 yen, its highest position since February 2003.
Kyocera, the world's biggest maker of ceramic chip packages, added 1.5% to 8,560 yen while Toyota, the world's second-largest carmaker, climbed 1% to 5,990 yen.
And Softbank rose on the first day the company's shares were adjusted for a 3-for-1 stock split. Japan's second-biggest high-speed Internet services provider, gained 3.2% to 4,380 yen. Shareholders of record on Jan. 4 will receive three shares for every one they own, Softbank said last month.
In the US, stocks tumbled yesterday as the bond market gave signals that in the past have preceded economic slowdowns causing the Dow Jones Industrial Average to lose more than 100 points.
The Dow Jones Industrial Average fell 105.50 points, or 0.97%, to 10,777.77.
The yield curve, the spread between the yields of short-term and long-term bonds, inverted for the first time in five years. That means short-term interest rates were higher than long-term interest rates. Investors have been watching the yield curve closely because, in the past, inverted yield curves have preceded recessions.
The dollar rose against other major currencies; gold prices were also higher.
But crude oil futures fell. A barrel of light crude was quoted at $58.16, down 27 cents, in trading on the New York Mercantile Exchange.
The yield on the 10-year Treasury fell to 4.341%, while the two-year Treasury note closed at 4.347%.IFAonline
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till