The FTSE 100 Index struggled to make progress on Monday as European debt woes once again weighed on the minds of investors.
No direction was provided from Wall Street as US markets shut for Martin Luther King Day while concerns over Chinese moves to curb inflation continued to hit mining stocks.
The Footsie dropped 15.8 points to 5986.3 as uncertainty mounted ahead of a meeting in Brussels where eurozone finance ministers will lock horns over how to fight their crippling debt crisis.
Concerns still remain over Portugal’s debt, despite a successful bond auction last week, as economists fear the country could follow Greece and Ireland and be forced to accept a bailout.
Barclays, which is heavily exposed to the Iberian peninsula, was down 1%, or 3.4p, at 307.7p, while Lloyds was down 1.3p at 68.3p and HSBC dropped 6.1p at 703.6p.
Miners added downward pressure as the sector was hit by worries over China’s decision to raise the reserve ratio requirement for its banks. Investors fear the fiscal tightening may curb the country’s demand for commodities.
Silver miner Fresnillo dropped more than 4%, losing 66.7p at 1425.3p, while copper miner Kazakhmys shed 30p at 1610p and Anglo-Australian group Rio Tinto lost 66p at 4370p.
BP saw a strong session after it unveiled a £10 billion deal with Russia’s Rosneft and takeover talk provided some cheer, but failed to lift the market out of the red. The oil giant added 3p to 502.5p following Friday’s announcement of an Arctic exploration alliance and share swap with Russian government-owned Rosneft.
Oil and gas exploration firms followed suit and posted gains, with Petrofac up 3.7p at 1618p and Centrica ahead 1.7p at 328.9p.
Smiths Group headed up the risers board with an 8% surge, ahead 103p to 1385p, following Friday’s after-close announcement that the firm had rejected a £2.45 billion cash approach for its medical arm.