Wall Street's Dow Jones Industrial Average lost another 1% overnight and triggered falls of a similar size in Asia, while in London the FTSE 100 Index was 14.1 points lower at 5762.4.
The declines come amid fears of a drawn-out battle over the looming fiscal cliff, which will mean automatic tax increases and spending cuts from January 1.
Miners dominated the FTSE 100 fallers board, with Eurasian Natural Resources off 8.7p at 286.1p and Anglo American down 27p at 1857p.
Insurer Admiral was the biggest riser, up 36.5p to 1055.5p after Bank of America Merrill Lynch introduced a buy note on the stock.
In corporate news, International Airlines Group was higher after unveiling details of a turnaround plan for ailing Spanish carrier Iberia.
The British Airways owner will cut 4,500 jobs, as well as reduce capacity by 15% and downsize Iberia's fleet by 25 aircraft, as it looks to revive the airline, which made losses of 262 million euros (£210 million) in the first nine months of this year.
Iberia's troubles and the impact of superstorm Sandy, which grounded flights into and out of the US east coast last month, mean IAG expects an operating loss of about 120 million euros (£96 million) this year.
Shares responded well to the restructuring announcement, lifting 2p to 170p.