London's top index slipped on Monday, giving back some of the heavy gains it made last week, as markets worried about rising energy prices.

The index closed at 7203.83 points, 30.2 down on Friday's close, a drop of 0.4%.

"It's been a lacklustre start to the week, as the optimism of last week has given way to concerns that rising energy prices could well translate into weaker growth, as well as the risk of some possible policy tightening by central banks to help anchor future inflation expectations," said CMC Markets analyst Michael Hewson.

Travel companies such as IAG, the owner of British Airways, and Whitbread, the firm behind Premier Inn, joined housebuilders close to the bottom of the FTSE.

"It should come as no surprise that today has seen equity markets take a bit of a breather after their sudden leap forward last week," said IG chief market analyst Chris Beauchamp.

"Within the space of a few sessions the atmosphere had turned from bearish to firmly bullish. Today's hesitation doesn't change that fact, and with so little news on the calendar today some indecision was to be expected."

He added: "The FTSE 100 continues to show some hesitation around the 7,220 zone, but the 400-point rally from the September low does suggest that traders are happy to buy the dip even with this underperforming index."

Across the pond the S&P 500 was trading up 0.2% while the Dow Jones had dropped 0.1% as markets were closing in Europe.

Germany's Dax index dropped 0.7% while the Cac 40 in Paris dipped 0.8%.

Sterling was flat against the dollar at 1.3719, and fell 0.1% to 1.182 euros.

On the smaller FTSE 250 index Playtech, a gambling software business, was the runaway winner of the day.

Its shares rose an enormous 56% after agreeing to a £2.7 billion takeover by an Australian company.

The shares were trading around 9p under the 680p per share that Aristocrat had offered for the business, implying that investors think there is a chance the deal will fall through.

The deal will complete in the second quarter of 2022, as long as shareholders give it the thumbs up.

Elsewhere, investors in THG cautiously welcomed the news that its founder, Matthew Moulding, plans to give up his "golden share" that gave him extra control over the company.

The structure had prevented THG from being eligible for inclusion in the FTSE 100. The shares, which have plummeted 40% in the last month, rose 15.5% on Monday.

The biggest risers on the FTSE 100 were Hargreaves Lansdown, up 37.5p to 1,508.5p, Fresnillo, up 17.4p to 863p, Evraz, up 12.2p to 629.6p, Pershing Square, up 45p to 2,880p, and Entain, up 27p to 2,124p. The biggest fallers on the FTSE 100 were IAG, down 7p to 175.72p, United Utilities, down 16p to 533p, Anglo American, down 86p to 2,826p, Antofagasta, down 38p to 1,470p, and Whitbread, down 82p to 3,287p.