The FTSE 100 is down 25.8 points, or 0.42%, to 6,107.4 as fears about the US housing market continue to weigh on the index.
Plumbing firm Wolseley is the biggest loser with a fall of 1.96% to £11.98, closely followed by Hanson which has slipped 1.8% to 789p, while supermarket chain Morrisons has declined 1.6% to 308p.
Insurer Old Mutual has also fallen 1.67% to 161.5p, while 3I Group has dropped 1.55% to £11.11, although bid speculation is limiting losses as Unilever leads the advance with a rise of 2.63% to £15.23, following rumours it is a likely private equity target.
Imperial Tobacco Group is also up 2.39% to £22.75, closely followed by Pearson which has gained 1.29% to 822p, while DSG International has advanced 1.16% to 173.25p, and BT Group is up 1.01% to 300.25p.
In Japan the Nikkei 225 Stock Average slid 116.24, or 0.7%, to 16,744.15, after weak pay increases at companies damped speculation consumers will spend more.
Mitsubishi UFJ, the nation's largest bank, slid 40,000 yen, or 3%, to 1.31 million, while Sumitomo Realty & Development, Japan's third-largest property developer, slumped 190 yen, or 4.1%, to 4,440, and Sumitomo Mitsui Financial Group, the nation's No. 3 lender, declined 30,000 yen, or 2.8%, to 1.06 million.
TDK, Japan's biggest maker of magnetic heads for hard-disk drives, surged 460 yen, or 4.9%, to 9,950, while Alps Electric, an electronics components maker, jumped 68 yen, or 5.3%, to 1,362, after TDK announced it has started talks with Alps Electric to buy its hard-disk drive head division.
Mizuho Financial Group, Japan's second-largest bank, slid 18,000 yen, or 2.3%, to 753,000, Toshiba, the world's second-biggest maker of flash memory chips, advanced 11 yen, or 1.5%, to 769.
In the US the Dow Jones Industrial Average finished yesterday’s session up 26.28 points, or 0.22%, to 12,159.68, as falling oil prices and takeover news offset concerns over the sub-prime mortgage market.
Alcoa led the advance with a rise of 1.68% to $33.88, closely followed by Boeing which added 1.18% to $91.04, while Altria Group climbed 1.01% to $84.75, and JP Morgan Chase gained 0.85% to $47.70.
Procter & Gamble also performed well with a rise of 0.9% to $61.91, although gains were limited by Exxon Mobil which declined 0.46% to $70.69, while AT&T slipped 0.73% to $36.94.
However General Motors is the biggest loser with a fall of 2.88% to $29.38, closely followed by United Technologies which dropped 0.54% to $64.40, while Intel slipped 0.47% to $19.14.
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