Trade in London’s leading shares reflected ongoing concerns about the conflict in the Middle East although tentative signs of de-escalation sent oil prices lower.
The FTSE 100 was down 0.3% to 7,376.
Equities were heavily hit last week on fears forces aligned with Iran would enter the conflict and risk a region-wide war.
“Markets remain edgy amid the ongoing conflict in the Middle East, with the FTSE 100 pulled lower by commodity stocks,” said AJ Bell investment director Russ Mould.
“This followed a reverse in oil prices on reports Israel plans to delay its ground invasion of Gaza. Any sign of de-escalation would be received positively for humanitarian reasons but also by investors wary of the risks of the war in Gaza spreading to other parts of the region or bringing in other actors.”
In addition to concerns about the Middle East, the continued march higher in US treasury yields weighed on global equity markets and sent US futures lower.
Looking past the gloom, Mould pointed to US earnings this week and a raft of earnings releases from technology companies that have previously provided support for markets.
“This week the US earnings season really hots up with earnings reports from a good chunk of the ‘Magnificent Seven’ of tech stocks who, like their cinematic counterparts, have been standing tall alone against a wave of malign forces this year.”
FTSE 100 movers
The FTSE 100 top fallers were dominated by commodities companies, including Glencore, Anglo American, and Fresnillo, as iron ore futures slipped back from recent highs.
However, there was selling across a variety of sectors on Monday, with names such as Segro, Unite Group and BT suffering on the day.
Flutter Entertainment was the top riser gaining 2.5% as bargain hunters stepped in after a prolonged period of selling.