The FTSE 100 edged lower today as last week’s rally was ended by investors steering away from banking and energy stocks.
Banks have led the market higher over recent sessions following a deal over Greek debt and improving market sentiment toward the stocks which have been hit by market volatility over the past year.
They gained six per cent last week but fell today as the sector neared technically overbought levels according to its relative strength index.
But miners and energy companies were the biggest losers as concerns over world economic growth weighed on the stocks.
JPMorgan Cazenove reduced its rating on the miners to "neutral" on valuation grounds. Base metal price drops also hit the sector.
Miners Kazakhmys and Vedanta were both off by around 1.7 per cent. Meanwhile Tullow Oil fell by a similar level as UBS cut its recommendation on the oil explorer to "underweight" from "neutral" on valuation grounds.
National Grid also fell by 1.7 per cemt.
Automotive engineer GKN nudged down by 1.8 per cent while building materials firm CRH, which has recently joined the blue chip index, dipped by 2.2 per cent making it the steepest faller in early trading.
In banking Lloyds slipped 1.23 per cent, RBS 1.3 per cent and Barclays 1.5 per cent.
On the up side Essar bucked the downward trend of energy stocks with a 3.7 per cent rise.
In telecoms both BT and Vodafone were up by around 0.8 per cent.
BT could be line for a multi-million-pound tax credit according to reports while Vodafone is in line for a £1bn pound tax windfall if it wins its battle for control of Cable & Wireless Worldwide.
Meanwhile insurance buyout specialist Resolution put on 0.7 per cent and property company Hammerson 0.4 per cent.
On the FTSE 250 Russia focused Exillon Energy was on of the biggest fallers said its full-year loss widened as the positive effects of increased production and higher crude prices were offset by a foreign exchange loss and a loss on disposal of non-current assets. It was trading around three per cent down.
Premier Foods was down by more than four per cent as it reported a 29 per cent plunge on profit in 2011.
Meanwhile British banking software firm Misys was one of the main climbers, up 6.7 per cent, after has agreeing to be bought by private equity firm Vista Partners for £1.27bn. It had earlier dismissed an all-share merger with a rival and a competing private equity suitor.
In Europe delivery service TNT rose 1.7 per cent after United Parcel Service agreed to pay an increased 5.2bn euros (£4.3bn) for its Dutch rival.
In Asia the Nikkei closed up 0.1 per cent and the Hang Seng down 0.9 per cent.