The London market fell as oil prices tumbled and banking stocks lost ground due to fresh concerns over regulatory fines.
The FTSE 100 Index closed down 23 points at 5877 after Brent crude fell by more than a dollar to 30.86 US dollars amid calls from oil cartel Opec for the need for broad co-operation to help prices rise.
The cartel called on non-Opec oil producing nations to work with it to tackle oversupply to help increase prices.
Oil prices have collapsed by more than 70% since their peak of around 115 dollars a barrel in the summer of 2014.
Germany’s Dax and the Cac 40 in France were both slightly lower.
The pound was down a cent against the euro at just over 1.31, after UK factory orders weakened in the quarter to January hit by slow demand for exports, according to data from the CBI.
The CBI said both domestic and export new orders were near-flat, but that represented an improvement on the previous quarter when orders fell.
Sterling was also lower against the US dollar, at just over 1.42.
In stocks, BP fell 2.6p to 350.2p and Royal Dutch Shell slipped 14p to 1402p, as oil prices slipped.
Commodity shares make up about a fifth of the weighting of top flight shares. A lift in oil prices last week helped push the London market on Friday up 2.2%, marking its best session in a month.
Banks were lower after reports by Sky News late last week that said lenders were drawing up plans to put aside a further £5 billion for payment protection insurance (PPI) mis-selling as the
City regulator, the Financial Conduct Authority, prepares to introduce a two-year deadline for claims.
Lloyds Banking Group was 3.7p lower at 63.1p, Barclays was down 8.9p to 181.9p, Royal Bank of Scotland fell 10.8p to 251.3p and HSBC fell 6.1p to 473.5p.
CMC Markets analyst Jasper Lawler said: “The prospect of further fines for mis-selling interest rate swaps, regulatory pressure over IT system controls and uncertainty over HSBC’s possible relocation weighed on the shares of Britain’s top banks.”
B&Q owner Kingfisher was the worst performer in the top flight, down more than 6%, or 21.1p, to 324p, after it unveiled its plans to deliver £500 million in additional pre-tax profits by 2021 and return £600 million of capital to shareholders over the next three years.
The group has focused on streamlining the business, selling a controlling stake in B&Q China last year and setting out plans to shrink 15% of the B&Q store estate in the UK by 2016/17, reflecting roughly 60 stores.
It said it now plans to create a unified home improvement brand, boost its online presence and improve efficiency.
But analysts at Investec called its buyback plans “insufficient, given the execution risk”.
The biggest risers in the FTSE 100 Index were Glencore up 2.3p at 80.9p, Sage Group up 13.5p at 568p, Berkeley Group up 82p at 3547p and Persimmon up 37p at 1948p.
The biggest fallers in the FTSE 100 Index were Kingfisher down 21.1p at 324p, Lloyds Banking Group down 3.7p at 63.1p, Barclays down 8.9p to 181.9p and Royal Bank of Scotland down 10.8p to 251.3p