Blue-chip shares fell on Tuesday as downbeat economic news from China eclipsed positive developments in Greece.
The FTSE 100 Index was 35.25 points adrift at 6700.97 after an hour of trading, with indices in Paris and Frankfurt also in the red.
The Chinese government allowed its currency to fall to three-year lows against the dollar this morning, with an overall 2% decline in value, in a ‘one off depreciation’ designed to combat the news from the start of the week that exports had seen their biggest fall in four months.
China's decision to devalue the yuan was taking its toll on commodities as a whole. BHP Billiton (LON:BLT) fell 1.28p to 1193.5p, Rio Tinto (LON:RIO) dropped 29.5p to 2605.5p and Antofagasta (LON:ANTO) reversed 0.4p to 591.5p.
But there was cheer in Europe where Athens made progress in talks to secure its third bailout ahead of a ratification vote on Wednesday and potential approval by eurozone finance ministers at the end of the week.
Spreadex analyst Connor Campbell said: "Whilst this would in theory bring with it the end of this ugly, and painfully revealing, period for Greece and the Eurozone alike, for Alexis Tsipras it provides another stick to be beaten with ahead of his reportedly planned autumn elections."
In UK economic news, house purchase lending rose 22% in June against May but declined slightly against the same month a year ago, according to the Council of Mortgage Lenders.
Back in London, bookmaker Ladbrokes (LON:LAD) edged up 0.1p to 110.1p as it reported lower profits but vowed to press ahead with changes including its planned merger with Gala Coral.
Retailer Card Factory (LON:CARD) fell 3.1p to 363.8p despite an upbeat trading update.
Support services group Serco (LON:SRP) advanced 4.2p to 129.7p after reporting a better-than-expected first half.
Just Retirement Group (LON:JRG) rose 1.5p to 200.2p as it announced plans to merge with Partnership Assurance in a £668.5mln deal.
In small caps, North River Resources (LON:NRRP) said if it does not receive shareholder approval for a US$4mln finance package from Greenstone, it is unlikely it will keep going.
Shareholders voted down the last attempt at a US$12mln financing in June due to concerns over the size of the stake that would have ended up with major shareholder Greenstone, but appear to have little choice with the latest package. Shares plummeted 35% to 0.18p.
Conversely, Stratex (LON:STI) was one of the biggest risers today, up 8.6% to 8.2p. The company said mineralisation has been confirmed at the Dalafin gold project in Senegal.
Elsewhere, Eurasia Mining (LON:EUA) started drilling at its Monchetundra platinum deposit in Russia, its second project in the country. It too was higher, gaining 6.25% to 0.85p.