Plummeting oil prices eclipsed upbeat developments in Greece, putting the skids under London shares on Monday.
The FTSE 100 index dropped 14.21 points to 6536 as the price of a barrel of US light crude slipped more than 2% to $41.64. A barrel of Brent declined 1.5% to $48.45.
Heavyweights BP (LON:BP.) and Royal Dutch Shell (LON:RDSB) dragged the market lower, falling 2p to 377.25p and 7.5p to 1806.5p respectively. BG Group (LON:BG.) deflated a penny to 1071p.
Augustin Eden at Accendo Markets said: "A generally gloomy outlook remains planted firmly over the market as supply increases with a drop in demand from key consumer China seen as a major headwind for the price."
Indices in Frankfurt and Paris were up on Friday's news that the Eurogroup of eurozone finance ministers had agreed a third Greek bailout.
Germany's Chancellor Angela Merkel sought to reassure the International Monetary Fund by indicating that she was willing to consider debt relief as part of a deal.
Wednesday will provide the acid test as German lawmakers vote on the latest package.
Japan's Q2 preliminary GDP contracted less than expected, beating consensus while nonetheless remaining in the red and sparking talk of further stimulus measures.
The Nikkei rose 0.4% on the news while Australia’s ASX index added 0.37%.
The yuan was fixed at close to where it finished Friday. This left the Shanghai Composite little changed, though in Hong Kong the Hang Seng was off by almost 1%.
Bovis Homes (LON:BVS) provided the main corporate interest, falling 29p to 1172p despite news of record home completions and higher profits and dividends.
Supermarket group Morrisons (LON:MRW) was off 1.2p at 176.6p following weekend press speculation that it could sell off its M Local convenience store chain.
Troubled insurance claims contractor Quindell (LON:QPP) rose 2.5p to 95.5p as it appointed a new chief executive.
Shipping broker Clarkson (LON:CKN) sank 125p to 2625p as it posted higher profits and dividends but said results would be weighted to the second half.
Elswewhere, E-Therapeutics (LON:ETX) jumped 1.5p to 39p as it said it had launched discovery activities in the promising area of cancer immunotherapy.