FTSE dented by GSK

The FTSE 100 was dented by pharmaceutical giant GlaxoSmithKline today after concerns over one of its new treatments.

GSK shed 2.6 per cent after reported problems with tests on its lung medication Relovair.

Traders and investors were eyeing events in Berlin where German leader Angela Merkel and French President Nicolas Sarkozy are meeting today.

The Eurozone's debt crisis is top of the agenda while later this week the European Central Bank will hold its latest council meeting with investors keen to hear ECB president Mario Draghi's latest take on any action to ease the debt crisis.

Meanwhile in London Morrisons edged 0.1 per cent higher despite the grocer's festive trading update, which showed a slowdown in sales growth.

A raft of British retailers, including Tesco and Marks & Spencer, are set to report their Christmas sales figures this week, throwing the impact of heavy discounting on profit margins and prospects for consumer spending in 2012 into focus.

Struggling HMV shed 6.7 per cent after the entertainment retailer's Christmas trading update did little to improve investor sentiment towards the firm, which last month warned it could go out of business.

Banks added the most points to the blue-chip index, with Royal Bank of Scotland, up 0.8 percent, the highest riser as JPMorgan Cazenove upgraded its rating for the part-state-owned lender to "neutral" from "underweight" on hopes for the sale of its Global Banking & Markets (GBM) business.

Espirito Santo also weighed in on Barclays, ahead 0.2 per cent, recommending the bank's stock given its strong capital ratios, robust liquidity profile and positive earnings momentum.

Commodity prices were lower in Asian trade, with US crude oil down 0.6 per cent, while copper dropped one per cent.

The Nikkei closed down 1.16 per cent while the Hang Seng was up 1.47 per cent. Across the Atlantic later December's US employment index will be released while November consumer credit figures are due for release after the London market close.