The FTSE-100 index fell 3.3 points at 5684.5, with banking shares among the losers as former Barclays boss Bob Diamond looked to shift the focus on to his rivals during his grilling at the hand of MPs.
With his marathon testimony still going on as the London market shut, Lloyds was down 0.2p at 31.7p, Royal Bank of Scotland was off 2p at 214.5p and HSBC was 2.7p lower at 567.6p.
Barclays was down 1.1p at 166p after Oriel Securities cut its target price, saying it expects Barclays Capital to be wound down.
The beleaguered lender's shares are significantly lower than the 196p at which they opened last Thursday before the bank saw around £3 billion wiped from its market value as the Libor-fixing affair escalated.
However, London's leading share index was still close to two-month highs.
World markets have been boosted in recent weeks by hopes that central banks will announce more stimulus measures, although the rally ran out of steam yesterday.
A US holiday contributed to low volumes across the market, at less than half the 90-day daily average, with many investors preferring to wait on the sidelines ahead of the European Central Bank and Bank of England meetings.
"The market is lacking in a direction at the moment and if you see some policy responses the market could possibly continue this upward move but if you don't, they may struggle to make further progress from here," said Chris Beauchamp, market analyst at IG Index in London.
France's Cac-40 and Ger-many's Dax were both slightly lower, while markets in the US were closed for Independence Day.
The pound was down against the dollar at 1.56 after the ser-vices sector suffered its worst performance for eight months in June, suggesting the UK remains in recession and increasing the chances of more quantitative easing. However, sterling was up at 1.25 against the euro.
Tullow Oil was among the biggest fallers in London's top flight after it said earnings will take a $440 million (£280.4m) hit as it writes off assets following unsuccessful drilling campaigns. The shares fell 2%, or 29p, to 1502p.
Outside the top flight, housebuilder Taylor Wimpey was down 2.5% even though it said its markets remain stable and it expects to report an improved performance for the first half of 2012.
The group, which teetered on the brink of collapse in 2009 due to its massive debts, said it had recorded an average of 0.6 sales per week in the half year to July 1, compared to 0.56 in the previous year. The shares were off 1.3p at 48p.
Meanwhile, support services company Carillion saw its shares fall 3% after Government cut-backs hit first-half revenues.
However, the Wolverhampton-based firm said it has grown profit margins by being more selective in bidding for contracts, which helped offset a decline in UK construction revenues amid the Government's austerity drive. The shares were down 9p at 273.1p.
International Greetings, the official supplier of Christmas crackers to the Queen, saw shares rise 5% after it reported a jump in annual profits driven by a surge in greeting cards sales in the UK. The shares rose 2.5p to 53.8p.
Among the biggest Footsie risers were Aberdeen Asset Management up 8.8p at 263.8p, and Glencore ahead 8.3p at 312.1p, while among the biggest Footsie fallers were Vedanta Resources down 19p at 942p, and Babcock off 13p at 871p.