Britain's FTSE 100 fell to its lowest close in 16 months today, dragged down by weakness in banking group HSBC which countered a bounce in telecom and technology sectors.
With banks delivering 39 points of downside, the benchmark UK index ended 27.0 points lower at 5,916.7, its lowest close since 5,869.2 seen on October 18 1999.
Wall Street gave little fresh impetus to the UK market, with the blue chip Dow Jones average up a modest 35 points or 0.4 percent by the London close and the tech-starred Nasdaq Composite up eight points or 0.4 percent.
HSBC dropped 72 pence or seven percent, wiping 28 points off the FTSE 100 as it revealed lower than expected profits. The bank was also cautious about prospects given the U.S. slowdown and its impact on other markets.
Elsewhere in the bank sector, persistent worries of a margin squeeze and rising bad debts left Royal Bank of Scotland nursing a two percent loss ahead of results due on Thursday, while Barrclays lost 3.4 percent.
Other big losers included insurer Prudential, down 3.6 percent as Morgan Stanley downgraded to neutral in the wake of last week's results statement which revealed a lacklustre domestic performance and tough conditions in the United States.
Those declines countered a bounce in telecom and technology stocks, with heavyweight Vodafone up 2.3 percent from last week's lows.
UK tech investors were reassured by Friday's bounce in the U.S. Nasdaq index, up over one percent, along with positive news from computer services firm CMG, up seven percent after reporting 2000 profits marginally below expectations but forecasting a good set of results this year.