Heavyweight banking and mining stocks lost ground as the FTSE 100 Index made a subdued beginning to the trading week.
Royal Bank of Scotland and Lloyds Banking Group both lost more than 2% amid rumours of a Government windfall tax on the sector, while a stronger dollar hurt commodity stocks.
By mid-morning, the Footsie drifted 25.7 points lower to 5296.6 with little other corporate news to drive trading.
London's fall followed a mixed session in Asia, with Japan's Nikkei ahead 1.4% but the Hang Seng in Hong Kong off 0.8%.
Japanese investors were heartened by the dollar's recovery, as well as encouraging news about the American economy - a major export market - after better than expected jobless figures on Friday.
But the currency's revival depressed mining firms, with Eurasian Natural Resources losing 30.5p to 890.5p or 3% to make it the leading Footsie faller. Gold miner Randgold Resources was off 122p to 4851p as prices of the precious metal continued their slide from record levels.
Among the banks, part-nationalised RBS and Lloyds were down 0.8p to 33.8p and 1.3p to 54.7p respectively. Meanwhile Barclays was 5.2p down at 298.3p and HSBC lost 10.7p to 712.9p as the sector nervously awaited Wednesday's Pre-Budget Report.
The leading Footsie riser was accountancy software firm Sage, which continued its progress in the wake of well-received results last week, adding 4.2p to 235p.
But in the FTSE 250 waste management firm Shanks soared more than 40% after it suggested it is open to a takeover.
It has rejected an approach worth 135p a share, or £536 million, from a private equity group - thought to be US firm Carlyle - but added that a bid worth 150p a share could represent a successful price. Shares were 37.1p higher at 127.2p.
