The FTSE 100 share index fell 63.9 points down to 5,831.6 (down 1.1 per cent) on Monday.
Banks did badly on the whole with Alliance & Leicester, Barclays, HSBC, Lloyds TSB, Royal Bank of Scotland and Standard Chartered all falling 1.7-2.9 per cent. The only winner among banks was HBOS who rose 1.2 per cent.
Insurer Friends Provident dropped a massive 10.8 per cent after J.C. Flowers threatened to abandon its bid for the company if it did not initiate talks by Friday.
Miners also had a bad day with Vedanta Resources falling 0.6 per cent, Lonmin dropping 1.9 per cent, Kazakhmys fell 2.5 per cent and Xstrata dropped 3.2 per cent.
Supermarket chain Tesco saw its shares rise marginally by 0.8 per cent. Hotel and coffee-shop owner Whitbread also did well rising 2.4 per cent, as did pub-owner Mitchells and Butlers.
British Airways and software company Sage Group were among the losers of the day dropping 3.6 respectively and 3.1 per cent respectively.