LONDON: Britain's blue-chip share index slipped on Monday, with a drop in energy shares on the back of a sharp fall in oil prices and weaker financial stocks putting pressure on the broader market.
Kingfisher, Europe's largest home improvement retailer, fell 6.3 percent as investors reacted negatively to the cost of a plan to boost its profit. The plan will cost 800 million pounds over the next five years to deliver.
The benchmark FTSE 100 index fell 0.5 percent to 5,873.05 points by 1426 GMT, having gained earlier in the session and rallied at the tail-end of last week to post its first weekly rise of 2016.
The UK Oil and Gas index fell 1 percent after oil prices fell 3 percent as Iraq announced record-high oil production, feeding into a heavily oversupplied market. Shares in BP, BG Group, Royal Dutch Shell fell 0.5 to 3.5 percent.
"The initial blip higher in the FTSE 100 was met by a wave of selling this morning," said Manoj Ladwa, head of trading at TJM Partners. "As is the case almost on a daily basis, commodity and oil related stocks are leading the index lower.
UK financial stocks were led lower by Lloyds Bank, which fell 4 percent after JP Morgan cut its target price for the stock. Other banks also fell with Barclays, HSBC and Standard Chartered down 1.1 to 3.5 percent, in line with a Europe-wide sell off in financials.
Analysts said the markets could continue to be under pressure in the near term.
"Fundamentally, the situation is no different to how it was a number of weeks ago," said Brenda Kelly, head analyst at London Capital Group.
"The FTSE, having initially started proceedings oscillating the 5,900 level has already begun to falter, with the materials sector providing what has become a fairly habitual drag on the UK benchmark."
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