Britain's leading share index was down 1.2 percent early on Monday, pressured by banks and commodity stocks as fears of a swine flu pandemic, which has already killed 103 people in Mexico, hits sentiment.
By 0736 GMT the FTSE 100 was down 50.06 points at 4,105.93 after rallying 3.4 percent on Friday and gaining 1.5 percent last week. The UK index is down 7.6 percent this year but is up 17 percent since hitting a six-year low on March 9.
Heavyweight commodity stocks were down sharply as raw material prices fell on demand concerns made worse by the swine flu fears. Oil majors BP and Royal Dutch Shell shed 2.4 and 2.3 percent, respectively.
Miners BHP Billiton, Rio Tinto, Anglo American, Xstrata, Kazakhmys, Vedanta Resources, Antofagasta and Lonmin lost between 2.5 and 4.4 percent.
The virus from Mexico has spread to the United States and as far as New Zealand.
The threat of a global pandemic hit shares in British Airways, already reeling from a severe recession, as well as other travel and transportation operators.
British Airways sank 7.7 percent, cruise operator Carnival dropped 7.2 percent, Thomas Cook shed 8.1 percent and TUI Travel sagged 5.7 percent.
"The swine flu seems to be one of those "Black Swan" events that has caught the market by surprise. This is a concern as to whether it might impact any potential … recovery chances," said Martin Slaney, head of derivatives at GFT Global Markets.
But GlaxoSmithKline advanced 3.5 percent. Its Relenza, or zanamivir, product along with Roche's Tamiflu, is the recommended drug for seasonal flu and has been shown to work against viral samples of the new disease.
Peers AstraZeneca and Shire put on 1.5 and 1.8 percent, respectively.
Richard Hunter, head of UK equities at Hargreaves Lansdown, said investors were pocketing recent gains after the index hit a closing high for two months on Friday.
Banks were other standout losers, with Barclays, HSBC, Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered down between 1.7 and 3.6 percent.
House prices in England and Wales fell by 10.1 percent in April compared with a year ago, while prices declined at their slowest monthly pace for a year, property data company Hometrack said.
Meanwhile almost 70 percent of Britain businesses plan to freeze or cut wages this year and half expected to cut jobs or make staff redundant, a survey by the British Chambers of Commerce showed, the Daily Telegraph said.
Insurer Aviva advanced 3.2 percent after it reported an increase in its capital cushion and said its first-quarter sales rose by a better than expected 11 percent.
