The FTSE 100 edged into the green at the end of trading following an improvement in sentiment after President Trump left hospital.
Caution over the US president’s condition saw the European markets open lower, but ticked higher after positive statements filtered out of the US.
However, the London markets were the slowest to recover as another jump in virus case numbers in England weighed on confidence.
London’s top flight closed seven points higher at 5,949.94 at the end of trading on Tuesday.
Connor Campbell, financial analyst at Spreadex, said: “Led by the Dow Jones, the European indices all improved as Tuesday went on – though that didn’t mean all that much for the FTSE.
“Now that Trump, irresponsibly or otherwise, is out of hospital and back at the White House, hopes appear to have been stirred that the Democrats and Republicans can finally get a new Covid-19 stimulus package over the line.
“This allowed the Eurozone indices to stretch their legs. The FTSE, sadly, lagged behind its peers, essentially flat, although that is an improvement on where it was at the start of the day, however, when it was down more than half a percent.”
The other major European markets sprang into the green on Tuesday afternoon on the back of positive messages from President Trump himself.
The German Dax increased by 0.61%, while the French Cac moved 0.8% higher.
Across the Atlantic, the Dow Jones moved higher while the S&P 500 was broadly flat having already benefited from optimism regarding the President’s health at the end of Monday’s session.
Meanwhile, sterling had its latest day of gains against the dollar as it continued to take advantage over the week-long weak spell for the US greenback.
The pound rose by 0.06% versus the US dollar at 1.294 and was down 0.5% against the euro at 1.098.
It was a strong session for housebuilders, with Barratt and Persimmon among those to rise after the latest set of construction PMI figures came in ahead of analyst predictions.
In company news, The Restaurant Group closed higher after the Wagamama owner told investors trading has been “very encouraging” since sites reopened.
The company, which also owns Frankie & Benny’s, gave the positive statement despite seeing its half-year losses nearly triple during the pandemic.
Shares in the hospitality company moved 2.45p higher to 57p at the close of play.
Watches of Switzerland surged in value after it lifted its full-year outlook due to better-than-expected demand.
The group closed 86.5p higher at 420p after it said constant currency revenues jumped by a fifth in the first 10 weeks of its second quarter to October 25.
Elsewhere, security giant G4S nudged 0.9p higher to 201.9p after it was awarded a £300 million Government contract to run a new mega-prison for 10 years.
The price of oil built on gains from Monday as adverse weather in the Gulf of Mexico helped to push up energy prices.
The price of a barrel of Brent crude oil increased by 0.42% to 42.58 US dollars.
The biggest risers on the FTSE 100 were Rolls-Royce, up 26.6p at 150p, IAG, up 6.46p at 98p, Whitbread, up 123p at 2,312p, and Intercontinental Hotels Group, up 229p at 4,307p.
The biggest fallers of the day were Ocado, down 237p at 2,431p, Rentokil, down 19.8p at 523p, Croda, down 174p at 6,152p, and Pennon, down 28p at 1,032p.