Britain's top share index eased 0.3 percent early on Monday, as monetary tightening fears weighed on the mining sector, offsetting gains in defensive issues and with BT Group boosted by a Citigroup upgrade.
By 0910 GMT the FTSE 100 index was 17.83 points lower at 5,607.82, having added just 0.5 percent last week.
The move on the FTSE echoed falls in Asia where stocks fell from near seven-week highs on Monday, while U.S. stocks ended near breakeven on Friday after mixed U.S. consumer confidence and retail sales data.
Miners were the main drag on the UK blue chip index, retracing some of Friday's gains, with copper prices falling nearly 2 percent as investors worried about Chinese inflation.
Eurasian Natural Resources, Vedanta Resources, Antofagasta, Kazakhmys, Rio Tinto and Anglo American shed 0.1 to 1.3 percent.
"The growing speculation of a rise in interest rates in China has got resource stocks on the move," said Jimmy Yates, head of equities at CMC Markets.
"That coupled with movements in the banking sector should see all of the major sectors pull in the same direction." Banks halted recent gains as the sector awaited the new banking regulation bill set to be unveiled in the U.S. on Tuesday, and with some negative broker comment.
Royal Bank of Scotland, Lloyds Banking Group and Barclays fell 0.7 to 1.2 percent. Seymour Pierce initiated coverage on the three UK banks with "sell" ratings.
And global banking heavyweight HSBC dipped 0.2 percent as KBW downgraded its rating to "marketperform" from "outperform", although Seymour Pierce started it as "buy".
BSkyB fell 1.3 percent as Evolution Securities cut its rating on the stock to "reduce" from "neutral" on valuation grounds.
The satellite broadcaster's shares rose 5 percent in the previous session after traders cited talk that Rupert Murdoch may take the firm private.
Chipmaker Arm and midcap peer CSR dropped 1.3 and 3.1 percent respectively as UBS cut its ratings on both firms to "neutral" from "buy", also citing valuation grounds.
British American Tobacco and Imperial Tobacco extended recent losses, falling 1.2 and 0.6 percent respectively.
BT UPGRADE
BT gained 2.5 percent, topping the FTSE 100 leaders board as Citigroup upped its rating for the telecoms operator to "buy" from "hold" with an increased target price of 150 pence, up from 145 pence, citing valuation grounds.
Other defensively-perceived issues were the main support for the FTSE.
Utilities firm Centrica was 1.9 percent higher as Nomura raised its target price to 370 pence from 340 pence. Peers United Utilities, National Grid and Severn Trent rose 0.2-0.9 percent.
Food retailers bounced back from Friday's falls. Wm Morrison added 0.8 percent having been in the doldrums since reporting full-year results last week, while, Tesco and J Sainsbury firmed 0.4 and 0.2 percent respectively.
Brewer SABMiller rose 0.3 percent.
The annual growth in asking prices for residential property in England and Wales slowed in March for the first time in a year after a glut of houses came on to the market, property website Rightmove said on Monday.
No important UK economic pointers were due for release on Monday, leaving investors to await a batch of U.S. data in the afternoon.
The March Empire State Index is scheduled for release at 1230 GMT, with U.S. February industrial output and capital utilization numbers due at 1315 GMT, followed by March's National Association of Homebuilders index after the London close at 1700 GMT.
