Increasing tensions in Ukraine and disappointing earnings figures from Barclays led the London market to give up some of the gains that it made last week.
The FTSE 100 Index ended the session 23.7 points lower at 6798.6 after registering gains for five sessions in a row the previous week.
However, the pound came within a whisker of 1.70 against the US dollar, its highest level for nearly five years, following better-than-expected figures from the services sector in the latest Markit/CIPS survey.
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Sterling was also higher at 1.22 against the euro.
Market sentiment was hit by the ongoing crisis in Ukraine after its government launched an operation to drive out pro-Russian insurgents occupying buildings in the east of the country and the Kremlin responded with military exercises near the border.
Barclays posted a 5% fall in pre-tax profits to £1.69 billion for the first three months of the year as earnings from its investment bank slumped by half.
Shares were down 5% or 13.5p at 245p, while Lloyds Banking Group was off 1.1p at 78.5p in a gloomy session for banks.
AstraZeneca shares fell 130.5p to 4677.5p as the UK drugs maker set out its defence against US rival Pfizer and business secretary Vince Cable said that he had not ruled out intervening in any formal bid.
The stock price, which is well short of Pfizer's proposed offer price of £50, fell as Astra outlined its "exciting" prospects as an independent company and it set out plans to grow sales to more than £27bn by 2023.
Outside the top flight, Dixons Retail Group rose 1.7p to 49.7p and Carphone Warehouse lifted 11.1p to 335.5p after reports that the companies are set to announce details of a £4bn merger within days.
But shares in Balfour Beatty suffered a 20% plunge that wiped almost a fifth off its market value after its chief executive quit in the wake of a profits warning.
Balfour was down 20%, or 57.2p to 228.6p, as Andrew McNaughton resigned from the group with immediate effect following the disclosure of a £300 million shortfall in its British construction arm.
Retailer Mothercare suffered a City backlash after reports that it was renegotiating the terms of its bank loans just seven months after it secured a £90m refinancing facility.
Mothercare issued a statement saying it expected to remain within banking covenants, but shares were still down 11%, or 6p, at 175.5p.
The biggest FTSE 100 risers were Persimmon, up 51p at 1378p, Sainsbury's, up 12.1p at 333.4p, Morrisons, up 5.8p at 202p, and Intertek, up 67p at 2995p.
The biggest fallers were Barclays down 13.5p at 245p, Shire down 108p at 3359p, AstraZeneca down 130.5p at 4677.5p and Coca-Cola HBC down 1445p at 35p.