Britain's leading share index fell 1.1 percent early on Thursday, taking its cue from Wall Street where rising U.S. government bond yields were seen dampening hopes of an economic recovery.
By 0721 GMT, the FTSE 100 was down 47.24 points at 4,368.99, after rising for three straight sessions. The UK benchmark is down 1.5 percent this year but has rallied 26 percent since hitting a six-year low on March 9.
Commodity shares fell, tracking softer crude and base metal prices. Oil majors BP and Royal Dutch Shell lost 0.6 and 0.3 percent, respectively.
In the mining sector, BHP Billiton, Rio Tinto, Anglo American, Xstrata, Lonmin and Vedanta Resources were off 0.9 percent to 2.1 percent.
Gold miner Randgold Resources and silver miner Fresnillo, however, added 0.2 and 1.6 percent as precious metals held steady.
"We have rallied in the last few months on a sense of optimism. Reality is setting in. The level of debt throughout the world, especially in the U.S. and the UK, are finally beginning to worry people," said Mark Priest, senior equities trader at ETX Capital.
"We saw the sell-off (in the U.S.) yesterday. That was mainly due to concern about the level (of) U.S. debt and rising bond yields. Inevitably, we will have the same over here because of the high level of debt. We could, over the next few weeks, see a bit of correction."
U.S. stocks dropped on Wednesday as rising yields on U.S. government debt fuelled concern that businesses and consumers could face higher borrowing costs, which could hamper an economic recovery.
The yield on U.S. Treasuries, a key benchmark for many lending rates, rose on concerns about the heavy supply of debt, weighing on the market in spite of a well-received auction of new five-year notes.
Banks, which have rallied 112 percent since early March, were other standout losers on the FTSE 100.
Barclays, HSBC, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland dropped 0.9 percent to 2 percent.
Elsewhere in the financial sector, Man Group sank 8.7 percent after the world's largest-listed hedge fund firm said that assets under management fell to $44 billion by May 26, from $46.8 billion at end-March.
United Utilities slipped 1.5 percent after the water company reported full-year underlying operating profits up 10 percent, beating consensus, in spite of a challenging environment.
Among mid-caps, building supplies company Wolseley shed 8.3 percent after it said nine-month profit slumped 80 percent, as most of its markets weakened in March and April.
Sugar and sweetener maker Tate & Lyle sagged 3 percent. It reported a 2 percent decline in full-year adjusted pretax profit and said it was difficult to predict, with confidence, the outlook for 2010.
