Brighter banking stocks helped the FTSE 100 Index recover from a dismal start to stand at 3613.5 at midsession, down just 2.6 points.
Fears over war and terrorism dragged the Footsie 47 points lower in the opening minutes before it readjusted.
Barclays is up 6 per cent or 19.5 pence to 361.5 pence as investors appeared relieved that annual figures from the bank did not contain any surprises.
The sector as a whole gained, with Lloyds TSB up 14.75 pence to 424.75 pence, Royal Bank of Scotland 30 pence ahead at £14.79 and Abbey National gaining 8.5 pence to 425 pence.
Even Bank of Scotland owner HBOS has improved 12 pence to 601 pence despite being hit with a £750,000 fine by the City's watchdog for putting 30,000 PEP and ISA customers "at risk of losing money".
Other risers during a busy session for corporate news include Unilever, up 15.5 pence to 526 pence, after reporting a rise in profits on the back of growth in its core brands.
But BT has seen its shares fall almost 5per cent, down 9 pence to 174 pence after it announced a fall in third quarter pre-tax profits and warned it expected a £1.5 billion pension deficit for 2002.
Centrica has slumped 6 per cent, or 10 pence to 156 pence, despite reporting a 48 per cent rise in full year profits after it warned shareholders its ambitions in North America depended on the "availability and pace of key acquisition opportunities".
PA