The FTSE 100 Index has lost 22.60 points, or 0.4%, to 5742.00 points this morning, led by banks on speculation the European Central Bank will increase interest rates.
HSBC has dropped 6p, or 0.7%, to 920.50p, Royal Bank of Scotland has fallen 23p, or 1.3%, to 1,759p and HBOS has declined 8.5p, or 0.9%, to 926p.
Vodafone has also dropped 1p, or 0.8%, to 125.75p, while BT has declined 2.75p, or 1.2%, to 233.50p.
Man Group has fallen 21p, or 0.9%, to 2,422p after it said there were no "abnormally high" withdrawals of funds by clients in May as stock markets plunged. Man Group estimates hedge funds on average lost between 1.5% and 2% in May.
Meanwhile, BAA has gained 4.5p, or 0.5%, to 909.50p on news a Goldman Sachs-led group has offered more than £10.2bn in cash for BAA.
Misys has also advanced 3p, or 1.6%, to 188p after its shares were raised to "buy" from "hold" by analysts at Deutsche Bank, who said they were optimistic in terms of the trading update due 21 June.
In Japan, the Nikkei 225 Stock Average dropped 121.0 points, or 0.8%, to 15,668.31 points after crude oil prices jumped in New York, raising concern inflation will accelerate and prompt further interest rate increases.
Mitsubishi UFJ led banks lower, falling 30,000 yen, or 1.9%, to 1.54m.
Japan's government, which is marketing 277,245 shares of Mitsubishi UFJ stock based on the current price, is expected to price the equities as early as today. The flood of shares into the market may depress the share price.
Sumitomo Mitsui Financial Group slid 10,000 yen, or 0.9%, to 1.11m and Mizuho Financial Group lost 8,000 yen, or 0.9%, to 934,000.
Meanwhile, energy-related stocks gained as oil prices rose.
Inpex Holdings advanced 21,000 yen, or 2.2%, to 970,000, Japan Petroleum Exploration climbed 110 yen, or 1.5%, to 7,510 and Nippon Mining Holdings jumped 40 yen, or 4.1%, to 1,014.
In the US, the Dow Jones industrial average declined 12.41 points, or 0.11%, to end at 11,247.87 points on Friday as investors worried a government report showing weaker jobs growth may be pointing to an economic slowdown, which would hurt corporate profits.
Wal-Mart Stores lost 1.2%, or 56 cents, to $47.83, while Home Depot fell 1.4%, or 55 cents, to $38.
Caterpillar, among companies whose fortunes are closely tied to economic cycles, fell 0.7%, or 48 cents, to $72.81, and International Business Machines (IBM) fell 1.4%, or $1.14, to $79.55.
On a more positive note, Altria Group - considered a defensive play in times of economic slowdowns due to its ownership of cigarette maker Philip Morris USA - gained 0.6%, or 44 cents, to $72.85.
Banks also rose on the view an economic slowdown might persuade the Federal Reserve to take a break from raising rates. Bank of America rose 1.2%, or 56 cents, to $49.26.IFAonline
Partner Insight: Continuing the Architas education series for clients.
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