Investor appetite for risk was also limited ahead of some closely-watched economic data during the session, namely UK inflation figures and German confidence.

London’s FTSE 100 was trading 0.2 per cent lower at 6,791 in early deals after a subdued session on Monday.

“Yesterday’s flat session is likely to be symptomatic of the sessions in the run up to the FOMC and Scottish Independence vote as traders are unwilling to put positions on over a coin toss,” said Jonathan Sudaria from Capital Spreads.

The annual rate of UK consumer-price inflation is expected to have eased from 1.6 per cent to 1.5 per cent in August, further away from the government’s 2 per cent target.

Meanwhile, the German investor confidence index is forecast to drop for a ninth consecutive month, from 8.5 to 5 in September, thanks to concerns about the Eurozone economy and concerns about events in Ukraine.

Asos shares sink

The share price of Asos dropped sharply after the online fashion retailer said profits in the year to August 2015 would be “at a similar level” to the previous period.

Sector peer N Brown was also under pressure after saying that first-half revenues fell 0.6 per cent.

Housebuilder Crest Nicholson has, like its peers, seen a “slight moderation” in sales rates over the last few months, causing shares to fall early on.

SABMiller pulled back after a 10 per cent surge on Monday on the back of rumours that AB InBev was readying a takeover bid for the Peroni and Grolsch maker. Markets were still reacting to the announcement that Heineken had rejected an initial approach from SABMiller.

Beverages counterpart Diageo, however, was extending gains after hopes for industry consolidation gave the stock a boost the previous session.

Mining peers Anglo American and Antofagasta were performing well after Deutsche Bank upgraded its ratings and target prices for both stocks. Anglo was rated ‘buy’, while Antofagasta was labelled a ‘hold’.

Africa-focused Ophir Energy edged higher after a new gas discovery in block R increased the value of its offshore Equatorial Guinea project.

The wider oil and gas sector was also in demand despite a drop in the price of crude, with Shell, BP and BG Group on the rise.

FTSE 100 – Risers
Pearson (PSON) 1,229.00p +1.91%
Antofagasta (ANTO) 770.00p +1.12%
Diageo (DGE) 1,872.00p +1.03%
Anglo American (AAL) 1,503.00p +0.97%
BG Group (BG.) 1,162.00p +0.74%
Admiral Group (ADM) 1,242.00p +0.57%
Royal Dutch Shell ‘A’ (RDSA) 2,401.00p +0.52%
Royal Dutch Shell ‘B’ (RDSB) 2,491.00p +0.44%
British Sky Broadcasting Group (BSY) 878.50p +0.40%
TUI Travel (TT.) 366.90p +0.33%

FTSE 100 – Fallers
ARM Holdings (ARM) 917.50p -2.19%
Sports Direct International (SPD) 676.50p -1.96%
SABMiller (SAB) 3,667.00p -1.95%
easyJet (EZJ) 1,336.00p -1.76%
Tullow Oil (TLW) 689.00p -1.64%
St James’s Place (STJ) 683.50p -1.58%
Sage Group (SGE) 377.00p -1.57%
Ashtead Group (AHT) 1,012.00p -1.46%
Johnson Matthey (JMAT) 3,095.00p -1.37%
Petrofac Ltd. (PFC) 1,041.00p -1.33%

Source: ShareCast