Investors showed little interest in returning to the market today following a second successive week of losses for the FTSE 100 Index.
Anxiety that quantitative easing in the United States will begin to be tapered off from next month has prompted selling on Wall Street and in the City.
There was little change in sentiment today, with the FTSE 100 Index off 20.5 points at 6479.6 and European markets down by more than 0.5%.
Mining stocks led the London sell-off as Anglo American declined 26.75p to 1520.75p and silver miner Fresnillo dropped 17p to 1155p.
Commodities trader Glencore Xstrata was the biggest top flight faller on expectations that it will write off up to £4.5 billion from the value of assets at Xstrata. Shares dropped 2%, or 6.6p to 301.7p, ahead of results tomorrow.
Today's weaker market sentiment came despite signs of a pick-up in deal activity.
Nasdaq-listed vacuum products specialist Edwards, which is based in Crawley and employs 3,200 people, is to be bought by Swedish firm Atlas Copco in a £1 billion deal.
And oil and gas engineering firm Kentz said it was the subject of takeover interest from two parties, Amec and Germany's M+W
Kentz rejected Amec's latest approach, which valued it at between £673 million and £691 million, after turning down another attempt last month. It also spurned an approach from Stuttgart-based M+W, which it said was worth less than Amec's.
The developments fuelled a rise in Kentz's share price of 22% or 104.85p to 580.5p. Amec was 7p lower at 1077p.