Britain's top share index dropped 1.1 percent early on Wednesday as miners and energy stocks fell on lower commodity prices and investors waited for the end of a U.S. Federal Reserve policy meeting.
By 0920 GMT the FTSE 100 was down 56.07 points at 5,220.78, touching its lowest level since Dec. 21 after it gained 0.3 percent the previous session, snapping a four-session losing streak.
Miners were the heaviest drag on the index with metal prices slipping as the outlook for demand was clouded by China's heightened efforts to rein in soaring credit growth, a factor which helped push Asian stocks lower for a ninth day.
Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and BHP Billiton fell 1.5 to 3.9 percent.
"The bad news that allegedly sparked the fall was China moving the reserve ratio, but that was just the implementation of what was announced last week so it shows that the market has got a bit nervous," said Steven Bell, director at hedge fund GLC."
China's largest bank ICBC, said on Wednesday it has stopped rolling over some loans after a surge in credit at the start of the year, in the latest evidence that banks may finally be heeding a government-directed clampdown.
There were nerves ahead of the conclusion of the latest two-day Federal Reserve Open Market Committee meeting, although a decision on U.S. interest rates and the central bank's quantitative easing policy is not due until after the London close, at 1915 GMT.
Energy stocks were also a significant weight on the index as crude oil held below $75 per barrel.
BG Group, BP, Royal Dutch Shell fell 0.8 to 1.9 percent. But Tullow Oil was the standout loser, down 4.8 percent after it launched a $1.6 billion share sale to pay for the development of assets in Uganda.
Banks, sensitive to shifts in investor sentiment, were also broadly lower. Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group fell 2 to 3.8 percent.
Hedge fund manager Man Group was also a big blue- chip faller, down 4.9 percent, as Credit Suisse cut its price target and estimates and its flagship AHL Diversified fund posted a 3.6 percent fall over the past week.
Vodafone, seen as having sound defensive qualities, was one of the few stocks in positive territory, up 0.4 percent.
Johnson Matthey outperformed, off 0.7 percent after the platinum specialist reported strong third-quarter results with profits before tax 20 percent higher than in the third quarter last year.
Ahead of the FOMC decision, a batch of U.S. economic indicators should attract interest, with the latest weekly mortgage and refinancing indexes due for release at 1330 GMT, followed by December new home sales at 1500 GMT.
The only British data likely to be of interest on Wednesday will be the January CBI distributive trades survey, set for release at 1100 GMT.
Ex-dividend factors knocked 0.64 points off the FTSE 100 index on Wednesday, with contract caterer Compass Group the only company losing its payout attractions.
