In early trading, the FTSE 100 is down 27.5 points, or 0.45%, to 6,133.4 despite a strong start by Standard Life following takeover speculation.
The Edinburgh-based insurer is posting the biggest gains so far with a rise of 2.3% to 289.5p, following reports over the weekend suggesting rival insurer Axa is considering a £7bn takeover approach for the group.
Drax Group is also up 1.06% to 812.5p, closely followed by British Energy which has gained 0.83% to 423p, while Kelda group has climbed 0.7% to 868p, and Hanson has added 0.56% to 715p.
On the downside, Shire Pharmaceuticals is the biggest drag on the index with a drop of 2.17% to 946p, closely followed by Home Retail which is down 2.14% to 399.75p after analysts moved the stock to ‘underweight’.
Reuters has also slipped 1.94% to 442.5p, closely followed by ITV which is down 1.64% to 105p, while Swiss miner Xstrata is leading a weak mining sector with a drop of 1.46% to £22.32.
In Japan, the Nikkei 225 Stock Average dropped 317.22, or 1.9%, to 16,351.85 at the 3pm close, as exporters suffered following a US government report showing the world's largest economy grew at the slowest pace in more than three years.
Canon, the world's largest digital camera maker, lost 220 yen, or 3.4%, to 6,270, while Honda Motor, Japan's No. 3 carmaker, dropped 140 yen, or 3.3%, to 4,130, as it had 55% of its sales in North America last year, and Toyota Motor declined 110 yen, or 1.6%, to 6,980.
Elsewhere, Tokyo Electron, the world's second-biggest supplier of chipmaking equipment, dropped 450 yen, or 5%, to 8,620, while Mitsubishi Heavy Industries, Japan's largest maker of ships and aircraft, lost 18 yen, or 3.3%, to 527, and Kawasaki Heavy Industries fell 18 yen, or 4%, to 428.
And TDK, which makes electronics components, dropped 210 yen, or 2.2%, to 9,260, while Nidec, a maker of small precision motors for electronic devices, declined 290 yen, or 3.1%, to 8,950, and Advantest, the world's biggest maker of memory-chip testing equipment, fell 120 yen, or 2%, to 5,820.
In the US on Friday, the Dow Jones Industrial Average fell 73.4 points, or 0.6%, to 12,090.26, after weaker than expected economic data sparked concern about a slowdown.
Alcoa was the biggest gainer with a rise of 2.5% to $28.30, closely followed by Boeing which gained 0.76% to $79.74, while Altria Group climbed 0.34% to $81.85, and Verizon Communications added 0.26% to $38.84.
Intel was the biggest drag on the index with a drop of 3.08% to $21.10, closely followed by Wal-Mart which slipped 1.97% to $50.73, while Hewlett-Packard fell 1.81% to $38.46, and Caterpillar dropped 1.73% to $61.27.IFAonline
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