The FTSE enjoyed a brief rally this morning - but all the gains were wiped out by 9.30am.
The index had opened up 1.3 per cent, driven by strong performance from banks and commodity stocks as investors welcomed the result of Sunday's Greek election.
A narrow victory by pro-bailout parties over radical leftists had eased concerns that the debt-laden country could leave the Eurozone.
But just 90 minutes later traders changed their mind. As a result the same commodity firms and financial institutions dragged the index down by 0.2 per cent.
Banks took most of the punishment with Lloyds down three per cent, RBS off 2.8 per cent and Barclays down 2.4 per cent. HSBC bucked the trend and added 0.3 per cent.
Mining giant Xstrata was close behind, dropping 2.1 per cent, while its sister firm Glencore lost two per cent.
Fellow commodities firms Randgold, Kazakhmys and Vedanta all suffered, while generator provider Aggreko lost 2.1 per cent.
Some solace could be found in high-end consumer goods, with fashion firm Burberry gaining 1.2 per cent and ARM Holdings - the firm that designs processors for Apple products - gaining one per cent.
BSkyB recovered 0.8 per cent after falling heavily at the tail-end of last week.
In the FTSE 250 Cable & Wireless Worldwide was up almost eight per cent after a major shareholder said it would not oppose a takeover bid for the firm.
Asian markets responded more favourably to the Greek election with Tokyo's Nikkei adding 1.8 per cent and the Hang Seng gaining one per cent.