The blue-chip FTSE 100 index closed down 0.06%, with energy <.FTNMX0530> and insurance stocks <.FTNMX2350> leading declines. The mid-cap index ended flat.
The energy index was one of the biggest drags on the FTSE 100 as oil prices slid nearly 2.5% after U.S. President Donald Trump on Tuesday called off talks with lawmakers on pandemic aid, and after a larger-than-forecast rise in U.S. crude stocks.
"There are hopes that the stimulus plans could be revived in the period between the election and January's inauguration which are probably helping investors keep the news in perspective for now," said Russ Mould, investment director at AJ Bell.
Wall Street's main indexes jumped on Wednesday as investors grew hopeful of at least a partial deal on more fiscal stimulus, but top White House officials on Wednesday downplayed the prospect of either a comprehensive deal or standalone measures.
Construction stocks <.FTNMX2350> provided support to the blue-chip index after a report by mortgage lender Halifax noted British house prices rose last month at the fastest annual pace since June 2016.
Britain's trade minister Liz Truss said on Wednesday a deal with the European Union over the pair's future trading relationship is "do-able" as the end of a transition period approaches.
"Investors are on an edge with continuing uncertainty on Brexit, and have taken the view that they can't place long bets in this environment," said TS Lombard strategist Andrea Cicione.
Tesco, Britain's biggest retailer by sales, pared earlier gains and closed 0.7% lower after it reported a jump in sales due to the COVID-19 pandemic and said it saw its FY21 operating profits being in line with the previous year.
British private security company G4S rose 0.2% after it once again rejected smaller Canadian rival GardaWorld's offer and dismissed claims made by the hostile bidders in a pitch to shareholders as misleading.
(Reporting by Shashank Nayar in Bengaluru; Editing by Uttaresh.V and Jan Harvey)
By Shashank Nayar