China and Europe weigh on Footsie

The London market dropped 16.37 points - or almost 0.3 per cent - to 5,985.70 as a meeting in Brussels got under way where eurozone finance ministers locked horns over how to tackle the ongoing debt woes.

David Jones, chief market strategist IG Index, said: "At the moment, this slide doesn't give any real reasons for concern - it is only if the FTSE index starts to slip to fresh-one-month lows below 5,900 that it could start to look like more than just a normal-slight correction."

Concerns still remain over Portugal's debt, despite a successful bond auction last week. Economists fear the country could follow Greece and Ireland and be forced to accept a bailout.

Barclays, which is exposed to the Iberian peninsula, was down 4.4p at 306.6p, while Lloyds slipped 1.5p to 68.1p and HSBC dropped 6.2p at 703.5p.

The uncertainty also hit the euro, which was down against the pound at €1.19. Sterling was up against the dollar at $1.59.

Miners added downward pressure as the sector was hit by worries over China's decision to raise the reserve ratio requirement for its banks. Investors fear the fiscal tightening may curb demand for commodities. Silver miner Fresnillo dropped more than 4 per cent, losing 53p at 1,439p, while copper miner Kazakhmys shed 24p at 1,616p and Anglo-Australian group Rio Tinto lost 51.5p at 4,384.5p.

BP saw a strong session after it unveiled a 10 billion deal with Russia's Rosneft and takeover talk provided some cheer, but failed to lift the market out of the red.

The oil giant added 1.2p to 500.7p following Friday's announcement of an Arctic exploration alliance and share swap with Russian government-owned Rosneft.

BP will take a further 9.5 per cent stake in Rosneft, while Rosneft will own 5 per cent of BP following the deal, which the UK government described as "ground breaking".

Oil and gas exploration firms and their support companies followed suit and posted gains, with Petrofac up 3p at 1,618p and Centrica 1.6p stronger at 328.8p.

Smiths Group headed up the risers board with an 8 per cent surge, ahead 99p to 1,381p, following Friday's after-close announcement that the firm had rejected a 2.45 billion cash approach for its medical arm.

Smith & Nephew followed it with a 4 per cent gain, up 24p to 709p, after weekend reports that US suitor Johnson & Johnson is preparing to make a formal offer for the group worth 7bn.

Rolls-Royce dropped 0.5p to 654p despite the engine maker unveiling its largest ever marine naval surface ship contract to supply vessels for the US Navy.

The firm will deliver gas turbines, waterjets and propulsion system software for ten US navy littoral combat ships made by defence firm Lockheed Martin.Among the Scottish stocks, Edinburgh-based online dating website operator Cupid - formerly known as EasyDate - jumped 3 per cent or 3.5p to close at 113.5p after raising expectations for its full-year results on the back of a series of takeovers.