Hopes that Greece will reach an agreement with lenders to avoid a default faded today, causing London’s leading shares index to retreat from a six-month high.
The FTSE 100 Index fell 30.7 points to 5,751.9, with banks among the biggest fallers amid fears that a default would cause massive disruption and instability to the sector.
Banking shares were also hit after the International Monetary Fund slashed growth forecasts for the UK and wider global economies.
Lloyds Banking Group dropped 0.9p to 31.7p, Royal Bank of Scotland (RBS) lost 1.1p to 27.1p, and Barclays was 4.2p lower at 218.5p.
Elsewhere in the finance sector, Hargreaves Lansdown fell 3%, or 15.3p to £4.31 after RBS cut its rating on the asset manager from hold to sell.
Oil firm Cairn Energy saw its shares slide 3%, or 9.8p to 282.4p after it pulled a £2.5million shares windfall for its founder and chairman Sir Bill Gammell.
Also among the big fallers was Pearson, down 53p at £11.83.
The biggest Footsie risers were International Power up 7.7p at £3.28, Weir Group ahead 43p at £19.27, Centrica up 5.1p at 287.5p and BG Group ahead 23p at £14.72.
Safer haven stocks were popular, helping National Grid to rise 8p to £6.22 and Severn Trent to add 5p to £15.22.
Carphone Warehouse was up 8%, or 24.3p at £3.38 despite it reporting a 4.7% drop in like-for-like revenue for the quarter to December 31.
FTSE 250 military equipment firm Chemring shed 14%, or 62.5p after it warned further economic turbulence in Europe could accelerate defence budget cuts.
David Barclay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, highlighted SSE up 1.38% to £12.53 and FirstGroup gaining 1.3% to 311.05p as well as STV Group sliding 4.59% to 94.5p and AG Barr down 3.85% at 1,244.5p.