Wall Street woe and China turmoil eclipsed upbeat news on Greece on Thursday, hitting early trading in London shares.
US markets staged a brief rally on a surprisingly dovish set of Federal Reserve meeting minutes, but ended the session in the red on global economic fears.
The dollar slipped 0.4% after the Fed minutes sparked more uncertainty about the timing of a US interest rate hike.
Greece was set to get the first €26bn tranche of its €86bn bailout, but traders focused instead on another downbeat session in the Chinese stock market.
The Shanghai Composite index dropped nearly 4% in early trading and ended 3.4% off at 3664.
Analyst Connor Campbell at spread-betting firm Spreadex said: "Another tumble by the Shanghai Composite merely reinforced the idea that the Chinese government is struggling to provide a tourniquet for its headline index."
The FTSE 100 Index dropped 23.6 points to 6379 in the first hour of trading. Frankfurt's DAX fell 54 points to 10,627 and France's CAC-40 was also off.
In economic news, UK July retail sales data came in as expected with a 0.4% volume rise against June. US weekly claims and existing home sales data were due later.
The price of a barrel of US light crude fell below US$41 in early trading, while a barrel of Brent dropped to US$46.9.
That hit markets, in particular BP (LON:BP.), which dipped 1.2p to 366.3p. Royal Dutch Shell (LON:RDSB) leaked 3p to 1737p and BG Group (LON:BG.) deflated 4p to 1041.5p.
Shares in Premier Oil (LON:PMO) backtracked 0.15p to 96p as it blamed write-offs for a dip into the red.
Stationer WH Smith (LON:SMWH) fell 11p to 1559p despite a forecast of slightly higher-than-expected annual results.
KAZ Minerals (LON:KAZ), formerly known as Kazakhmys, jumped 30.8p or 19.8% to 186.5p after it forecast zinc and silver output at the top end of expectations and maintained its guidance on copper for 2015. Analysts said the rise was also due to the devaluation of the Kazakhstan tenge.