The FTSE was flat on Wednesday as a rise in retailers led by Next and Marks & Spencer failed to inspire and as a lacklustre performance from heavyweight mining and oil stocks weighed.

Next shares soared 5.6 percent and the company attracted positive broker comment after it reported first-half results well ahead of consensus estimates. Sector peers benefited, with Kingfisher up 1.3 percent and Marks & Spencer up 2.9 percent with an extra boost from unconfirmed rumours that it was revaluing its property portfolio. DSG International added 1.8 percent.

Retailers are doing nicely this morning but miners and oils are pretty mixed and have a powerful influence. The market could benefit if Wall Street does well this afternoon, said Lawrence Peterman, investment director at Eden Financial. U.S. stock index futures pointed to a mixed start on Wall Street.

By 12:24 p.m. British time, The FTSE fell 2.5 points, or 0.04 percent, to 5,893, broadly in line with continental Europe.

Shares did not react to news that pay growth rose by less than expected in the three months to July but still at its fastest in over a year, while claimant count unemployment showed its biggest fall in 18 months. That came as no surprise to the market after Prime Minister Tony Blair told the Trade Union Congress on Tuesday he expected today's figures to show a welcome fall.

Among gainers, Brambles rose 2.2 percent after the dual listed Anglo Australian group's shares rose almost 4 percent in Sydney. The logistics company said it expects its pallet distribution and data storage operations to continue to support its growth in the year ahead.

In the leisure sector, Intercontinental Hotels rose 1.1 percent after JP Morgan said it increased its price target on the hotelier's stock due to the slightly lower average in price for the buy back in 2006 and the brokerage's higher cash returns assumption in 2007.

Among other standout gainers, BAE Systems tacked on 0.8 percent after it reported interim results above market forecasts and Numis Securities said it expects to raise its 2006 and 2007 earnings per share forecasts for the company. Rolls Royce was up 0.2 percent on sentiment.

Wolseley Group gained 1.8 percent on relief after San Francisco Federal Reserve President Janet Yellen said that the US housing market was slowing roughly as the Federal Reserve has expected. Slough Estates gained 0.7 percent after Goldman upped the price target.

Vodafone added 0.8 percent after UK telecoms regulator Ofcom said it had proposed new controls on wholesale mobile voice call termination charges that would come into effect when the current regulation expires in March 2007. BT was unchanged.

Miners were mixed. Some edged up with Antafogasta up 1 percent and Vedanta Resources Xstrata was 1.3 percent down. Base metals were under pressure as fund liquidation spilt over from the previous session, but traders said metals fundamentals had not really changed.

Oil dipped back below $64 a barrel on Wednesday as traders await the debate among members of the U.N. nuclear watchdog over Iran's atomic work. BP rose 0.4 percent after JP Morgan raised the company to overweight from neutral and Royal Dutch Shell was down 0.7 percent after it received the biggest fine of 108 million euros from the EU commission for fixing prices of road surface material bitumen in the Netherlands. Drax Group , which owns Europe's largest coal fired power station, was steady after a broker target upgrade.

Among utilities, Severn Trent added 1.2 percent after it announced the details of the Biffa demerger, which Bridgewell analyst Nick Spoliar described as an exciting development for the market.

Man Group led the decliners. The hedge fund operator fell after on last week's decline in the NAV of its flagship AHL Diversified Futures fund. Amongst other major decliners, Schroders fell 2.1 percent.

Companies that went ex-dividend were Diageo , which fell 1.3 percent, Scottish & Newcastle , which dropped 1.3 percent, and Shire Pharmaceuticals up 0.6 percent.

Among mid cap stocks, MyTravel Group fell 6 percent after it warned that its annual profit would be less than expected following difficult trading conditions.

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