The FTSE 100 declined 1% this morning, while financial bookmakers predicted a marginal loss in pre-trade.
The blue chips index was dragged down by banking stocks and base metal producers.
Banks declined as investors anxiously awaited the decision on a possible bailout for Ireland that could be worth tens of billions of euros, aimed at preventing its debt crisis from spreading into other eurozone countries.
Infrastructure software developer Autonomy Corporation (LON:AU) led the blue chips with a 4% gain. Hedge fund manager Man Group (LON:EMG) and quality and safety services group Intertek (LON:ITRK) added just over 1%.
Chipmaker ARM Holdings (LON:ARM) and specialist banking group Investec (LON:INVP) tacked on nearly 1%.
Software company Sage Group (LON:SGE) and outsourcer Capita Group (LON:CPI) were the heaviest fallers in the index with losses of 3%. Bank Standard Chartered (LON:STAN) and insurer Prudential (LON:PRU) shed just over 2%.
Other major banks HSBC (LON:HSBA) and Lloyds (LON:LLOY) lost nearly 2%. Base metal miners Rio Tinto (LON:RIO) and Anglo American (LON:AAL) declined 1.7%, while sector peer BHP Billiton (LON:BLT) was down 1.5%.
US stocks are projected to start with small losses today after rallying on Thursday with the Dow Jones, S&P 500 and NASDAQ composite indexes rising 1.55%.
Yesterday’s jobless claims update from the US Labor Department showed that initial claims increased by 2,000 to 439,000 last week. The less volatile four week moving average fell to 443,000.
General Motors (NYSE:GM) returned to the New York Stock Exchange (NYSE) yesterday, raising US$23.1 billion in its initial public offering (IPO).
In other news, the Philly Fed index, which is a survey on manufacturing activity in the Philadelphia Federal Reserve district, rallied from 1 in October to 22.5 in November, which was the highest level since November 2009.
Commodities
Oil prices advanced. US light, sweet crude for December delivery rose to US$82.44/barrel, while January crude reached US$82.97/barrel.
January Brent Crude last traded at US$85.79/barrel on the ICE Exchange.
Precious metals rose. Gold and silver reached US$1,358/oz and US$27.19/oz. Platinum went against the tide, falling to US$1,660/oz.
Base metals followed. Copper and nickel rose to US$3.86/lb and US$10.10/lb. Zinc declined to US$0.998/lb.