The FTSE-100 index gave back most of yesterday's gains, down 36.4 points at 5793.3, despite a sector-wide broker upgrade for UK bank stocks and better-than-expected third-quarter results from JP Morgan Chase.
The US bank said profits rose by one-third to $5.7 billion (£3.5bn) thanks to a rebound in mortgage refinancing.
Encouraging consumer confidence figures out in America initially helped the Dow Jones Industrial Average, but it soon slipped back to stand 15 points lower as the London market closed after figures from Wells Fargo bank disappointed.
Sentiment in London had also been hit by lacklustre trading in Asia, where investors were unconvinced by figures showing a sharp drop in jobless claims in the US economy. In currency news, sterling strengthened to $1.607 after falls earlier this week, while the pound was also higher at €1.24.
Financial stocks were among those enjoying gains after the JP Morgan figures and as broker Deutsche Bank upgraded its rating on the banking sector.
Bank shares were buoyed earlier this week by news that they do not have to hold extra capital against new loans made under the £80bn Funding for Lending scheme.
Standard Chartered led the sector higher with a rise of 32p to 1427.5p, while Lloyds Banking Group gained 0.5p to 39.7p. Barclays and HSBC lost early session rises, closing down 0.5p to 232.2p and 1.9p to 595.3p respectively.
Financial services provider Hargreaves Lansdown was the biggest Footsie riser after a first- quarter trading update showed record revenues, customer numbers and assets under administration, despite a quiet summer for the investment management industry.
Net new business fell 19%, but shares rose 3%, or 24p, to 712p as analysts praised a better-than-expected first quarter, given tough comparatives and a difficult summer hampered by the dearth of fund launches.
Global economy worries weighed on heavily-weighted miners, with Kazakhmys, down 30.5p to 715.5p, and Evraz, off 13.3p to 234.3p.
The engineering sector was hit by another profit warning, this time from industrial materials firm Morgan Crucible, coming just days after Cookson's profits alert. The shares plunged 11%, or 28.5p, to 227.3p – making it the biggest faller in the FTSE- 250 index.