Britain's top share index fell 1.0 percent in early trade on Tuesday weighed down by weakness in commodity stocks and caution ahead of UK inflation numbers.
By 0847 GMT, the FTSE 100 index was 40.31 points lower at 4,094.44, having fallen 1.3 percent on Monday.
"Markets are rather subdued, lacking any lead from Wall Street, and reflecting continued uncertainties over the earnings environment," said Jeremy Batstone-Carr, head of research at Charles Stanley.
U.S. markets were closed on Monday for Presidents Day but Asian stocks fell overnight, with Japan's Nikkei 225 hitting a three-month low.
Investors were wary ahead of January UK inflation data, with the headline rate likely to have eased further last month while lower interest rates, which have driven down mortgage costs, may have pushed retail price inflation into negative territory.
Heavyweight energy stocks were under pressure as crude prices remained below $37 a barrel, with BP, Royal Dutch Shell, and Cairn Energy down between 0.4 and 1.8 percent.
BG Group shed 0.9 percent as the firm raised its bid for coal-seam gas explorer Pure Energy Resources by 25 percent to A$995 million ($646 million) on Tuesday, trumping a rival bid by Arrow Energy. Miners were weak as demand concerns continued, with Kazakhmys, Eurasian Natural Resources, Xstrata, Anglo American and Vedanta Resources all down between 3.1 to 3.3 percent.
Major investors in Rio Tinto have poured scorn on efforts by the mining group to provide explanations of plans to raise $19.5 billion from state-owned Chinalco, shareholder sources said on Monday.
Advisers to BHP Billiton have surveyed investors in Rio Tinto about their support for an alternative to the Chinalco cash injection, the Financial Times said.
Rio Tinto fell 1.2 percent and BHP Billiton lost 2.3 percent.
Real estate group Land Securities was the top FTSE 100 faller, down 5.6 percent after confirming on Monday that it was considering a rights issue.
Other property blue chips also fell, reflecting the gloomy economic picture, with Hammerson, Liberty International, and British Land down 2.6 to 4.7 percent.
FINANCIALS PICK UP
Insurer Legal & General was the top FTSE 100 riser, recovering much of Monday's 10.5 percent fall with a 7.2 percent advance after the company said it has no plans to raise capital or cut its dividend.
L&G said its capital surplus is in excess of 1.6 billion pounds and it plans to more than double its credit default reserves.
Among other insurers, Aviva added 0.2 percent and Friends Provident took on 0.3 percent, but Prudential lost 1.4 percent ahead of new business numbers due on Friday.
Most hard-pressed banking issues moved higher, with Royal Bank of Scotland, Barclays and Lloyds Banking Group up between 3.4 and 2.0 percent.
Hedge fund manager Crispin Odey, who made a reputation short-selling UK banks, has turned bullish on some British lenders, such as Barclays and Royal Bank of Scotland, betting they will escape nationalisation.
The sector overall was weighed down by HSBC, off 2 percent after some cautious broker comment, with Morgan Stanley staying "underweight" and becoming more bearish on the outlook for profits.
