LONDON: Britain's leading share index fell back on Monday, reversing most of Friday's gains, led by weaker banks and miners unnerved by concerns that last week's EU summit agreement designed to solve the euro zone debt crisis might not go far enough.
Twenty-six European Union leaders -- all except Britain's -- on Friday agreed to pursue stricter budget rules for the single currency area and also to have euro zone states and others provide up to 200 billion euros in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis.
IMF chief economist Olivier Blanchard said at the weekend that the agreement for deeper economic integration was a step in the right direction but not a complete solution for the crisis.
British banks were big fallers, reversing Friday's advance, with the sector weighed by worries about the euro zone debt crisis and the isolation of Britain in any future negotiations after prime minister David Cameron failed to back the summit agreement.
RBS shed 2.5 percent as a long awaited report by Britain's Financial Services Authority said the lender was dragged to the brink of collapse three years ago by "poor management decisions, deficient regulation and a flawed supervisory approach".
"The continuing euro zone crisis and the UK's isolationist stance are front and centre for investors this morning, knocking risk-sensitive issues such as banks. But with volumes again thin, and little real incentive for anyone to get involved, the market is just drifting," said Mic Mills, head of electronic trading at ETX Capital.
By 0908 GMT, the FTSE 100 index was down 30.93 points, or 0.6 percent at 5,498.28, having closed up 0.8 percent on Friday, as investor sentiment soured again.
Miners fell as copper prices dropped, erasing some of the previous session's gains, as scepticism about Europe's moves towards fiscal union countered optimism that China's appetite for the metal will grow.
China's copper imports in November reached their highest level since March 2010, rising 17.9 percent on the month to 452,022 tonnes, preliminary data from China's General Administration of Customs showed on Saturday.
ENRC shed 4.8 percent, the biggest blue chip faller. The Kazakh miner is examining existing allegations of corruption at a Kazakh iron ore subsidiary but denied on Sunday that it was the subject of a formal investigation by Britain's Serious Fraud Office (SFO).
DEFENSIVE GAINS
Defensively-perceived stocks provided the main blue chip gainers, led by Imperial Tobacco and British American Tobacco, up 0.7 percent and 0.6 percent respectively.
Brewer SABMiller, up 0.4 percent, also got a boost from an Exane BNP Paribas upgrade to "neutral".
On the second-line, struggling baby goods chain Mothercare was a top FTSE 250 gainer, up 7.5 percent after the Sunday times said private equity giant Cinven was plotting an ambitious break-up bid for the group.
"With the holidays approaching, this week could be the week where traders make the decision to drive this market higher into the end of the year with a so-called 'Santa Claus Rally' or resume the downtrend which has been the theme for most of the year," said James A. Hyerczyk, Analyst at Autochartist.
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