Political gridlock in Washington left European markets in the red today amid disappointment over the lack of progress in resolving America's budget crisis.
The FTSE 100 Index was down by more than 50 points during the session though it later recovered ground to close 16.6 points off at 6437.3.
Following a poor run in Asian stock exchanges overnight, markets in France and Germany also dipped. On Wall Street, the Dow Jones Industrial Average was in negative territory as well.
The falls come as the impasse on Capitol Hill shows no signs of being resolved, after the US was last week forced to limit government operations when Congress failed to approve short-term funding to allow the nation to pay its bills.
Looming on the horizon is a potentially even more worrying stalemate on raising the administration's debt ceiling or borrowing limit, with a deadline of October 17.
In the latest blow, Republican speaker John Boehner has ruled out the possibility of a vote on raising the ceiling without the need for concessions from Barack Obama.
The crisis helped sterling make gains against the dollar, rising one cent to US$1.61, while it was flat against the euro at €1.19.
Among stocks on the blue-chip risers board, engines giant Rolls-Royce gained after it announced an order from Japan Airlines to buy 31 Airbus A350 aircraft which are powered by its Trent engines.
Rolls shares rose 4p to 1119p as the order represented a shift in Japanese aviation as carriers have traditionally favoured Airbus rival Boeing.
The order is also good news for Rolls staff at Derby, where the company employs around 11,000 people.
High street retailer Marks & Spencer was one of the biggest fallers in the top flight after Credit Suisse scaled back its full-year forecasts on the basis that the second quarter of the financial year has been slower than expected in clothing.
It believes general merchandise margins will have come under pressure due to higher mark-downs over the summer and an earlier mid-season sale.
M&S shares have enjoyed a strong run in recent weeks but fell back nearly 3% or 13.7p to 480.3p.
Other stocks from the retail sector were also under pressure, with Next down 60p at 5030p and Sports Direct 30.5p cheaper at 674.5p.
Outside the top flight, pork producer Cranswick fell 4% or 50p to 1096p after it said it expected half-year operating profits to be at a similar level to last year.
The pork producer, which supplies bacon and sausages to supermarkets including Tesco and Sainsbury's, has been hit by record pig prices, which has offset strong turnover growth in the fresh pork and bacon categories.
Panmure Gordon cut its forecast for full-year operating profits by 6% to £50 million but said it maintained its forecast for the following year.
The biggest FTSE 100 risers were Fresnillo up 18p to 931.5p, Aviva up 7.8p to 422.6p, ITV up 3.3p to 181.8p and Aggreko up 26p to 1468p.
The biggest FTSE 100 fallers were Sports Direct, down 30.5p to 674.5p, easyJet down 37p to 1260p, Marks & Spencer down 13.7p to 480.3p and Travis Perkins down 45p to 1640p.