Under-pressure drugmakers helped nudge the FTSE 100 lower by around midday on Tuesday, after AstraZeneca
With the weakest pipeline of its European peers, UK-listed AstraZeneca, down 2.3 percent, was hit hardest by a double blow to treatments for cancer and depression.
These triggered $381.5 million in charges and will push 2011 profits to the lower end of its forecast range.
UK peer GlaxoSmithKline
Britain's top share index <.FTSE> was down 14.04 points, or 0.3 percent, at 5,350.95. Volume, however, was painfully thin -- the FTSE 100 had traded just 18.9 percent of its average 90-day volume approaching midday.
Traders said most investors have closed their positions in the run-up to Christmas, citing lingering concerns over Europe's debt crisis and over the global economy as reasons to stay on the sidelines.
The FTSE 100 has fallen more than 9 percent this year.
We might see a mini-rally early in January as fund managers return to their desks and look to balance portfolios, but with the outlook for global growth looking bleak and no sign of a solution to Europe's debt crisis, the first half of 2012 could be painful for investors, Jimmy Yates, head of equities at CMC Markets, said.
Riskier assets such as miners <.FTNMX1770> and integrated oil stocks <.FTNM0530> were broadly weaker given the economic outlook.
Banks remained under pressure with no end to Europe's debt crisis in sight, and regulatory concerns lingering.
UK-listed banks <.FTNMX8350> extended the previous session's falls after the British government backed reforms to the country's banking system, which could cost lenders 8 billion pounds.
Royal Bank of Scotland
These proposals justify our preference for UK-Asian banks over UK domestic banks, which are operating in a hawkish regulatory environment with a worsening macroeconomic outlook, Nomura said in a note.
UBS said the reforms could wipe 1 billion pounds off Britain's GDP.
Also weighing on the FTSE was the forecast for a weaker open for U.S. stocks, ahead of U.S. housing starts and building permits data for November due out at 1330 GMT.
Europe's biggest home improvements retailer, Kingfisher
London-listed luxury goods firm Burberry
The firms are also in talks to create a new structure for Burberry's fragrance and cosmetics line.
Mid-cap <.FTMC> SVG Capital
(Editing by David Hulmes)