The leading share index ended lower on Monday, pressured by weakness in banking issues after international leaders said more money was needed from Europe to help ease the region's debt crisis, and with heavyweight HSBC falling after its results.
Euro zone countries pledged at a meeting of finance leaders of G20 economic powers on Sunday to reassess the strength of their bailout fund next month, reminding investors the debt crisis is far from over.
Banks bore the brunt of the blue-chip selling, unsettled by the G20 statement and having already been forced to take a significant haircut on Greek debt.
State-owned Lloyds Banking Group
Lloyds and RBS -- both bailed out by the taxpayer -- may access the European Central Bank's three-year, low-interest loans facility this week, the Financial Times reported on Monday.
At the close, the FTSE 100 <.FTSE> index was down 19.58 points, or 0.3 percent at 5,915.55, albeit rallying late on to recapture the 5,900 level relinquished earlier in the session.
The FTSE remains in the doldrums off the back of subdued trading, low volume and further euro zone concerns, said Andrew Crook, trader at Sucden Financial Private Clients.
Even encouraging U.S. monthly home sales figures appear to be a case of too little too late.
U.S. blue-chips <.DJI> recovered from early falls to trade 0.1 percent higher by London's close after the National Association of Realtors said contracts for U.S. home resales rose to a nearly two-year high in January.
A strong rise in the Dallas Fed Texas monthly manufacturing activity index also gave U.S. stocks a lift.
Miners <.FTNMX1770> staged a late turnaround in London, in tandem with firmer metal prices after the U.S. data, as demand hopes were revived by the signs of strength in the world's biggest economy, with copper up 0.2 percent.
Integrated oils were also higher, although crude prices stayed weak after recent strength.
A batch of blue-chip corporate news also provided some focus for investors on Monday.
India-focused refiner and power generator Essar Energy
Mild selling is fine. In fact, selling outweighing buying is a critical part of any freely operating marketplace, a characteristic that participants rely upon for accurate valuations and the ability to earn value, said David White, trader at Spreadex Ltd
If, as some analysts contest, 2012 is a year of opportunity for global equities, any sustained ascent will invariably include days like today that are as inconvenient to the bulls as they are essential to keep a strengthening market in check.
(Editing by David Hulmes)