The FTSE 100 Index fell 56.8 points, or 1%, to 5,827 points today, led by a weak US market.
Alliance & Leicester fell 5.66% to £10.84 after Credit Agricole confirmed it has decided against bidding for the mortgage bank.
BAE Systems dropped 2.04% to 348.25p on news it is to undertake an audit of Airbus to assess whether to recommend shareholders vote in favour of a sale of its 20% stake.
Kazakhmys also fell 1.80% to £11.97, while Rio Tinto declined 2.80% to £28.17 and BHP Billiton dropped 3.12% to £10.26.
In the US, the Dow Jones industrial average is down 81.32 points, or 0.72%, at 11,146.7 points on fresh concerns about higher interest rates.
Intel has fallen more than 1% to $19.11 after UBS cut its second-quarter earnings estimates on the company but kept its "buy" rating on the stock.
Occidental Petroleum has declined 2.9% to $101.59 after it said it will take a $306m, or 71 cents-per-share, after-tax charge after its oil fields in Ecuador were seized.
Shares in Advanced Micro Devices have also fallen 1.7% to $24.19 after UBS lowered its price target on the company to $29 from $33.IFAonline
Staying invested could prove lucrative
Consider lasting powers of attorney
Less environment, more governance threatens to undermine firms' green credentials
Evidence your compliance