Britain's blue-chip FTSE 100 index <.FTSE> fell 0.2 percent to 6,377.79 points by 1515 GMT, after managing a slight rebound last week from the 15-month lows it reached earlier in October.
The FTSE 100 hit a peak of 6,904.86 points at the start of September, its highest since early 2000, before slumping in October.
Growth senstitive "cyclical" stocks were the biggest fallers, with financials taking around 10 points off the index, while oil and gas stocks also weighed as Brent crude oil fell below $85 a barrel.
"The cyclicals are getting hit, and with the turmoil of the last few weeks, we've still got some turbulence to come," Zeg Choudhry, managing director at Lontrad, said.
"The way the market is swaying today is looking dangerous. I think we've still got a couple of hundred points of downside on the FTSE."
Lloyds was among the worst-performing FTSE 100 <.FTSE> stock in percentage terms, falling 1.8 percent. Lloyds just passed a test to determine whether it had enough capital to weather another economic crash, calling into question when it will resume paying dividends. [ID:nL5N0SL0IB]
However, it rallied off its lows ahead of results due on Tuesday.
Overall, roughly one in five of the euro zone's top lenders failed the health checks at the end of last year, but most have since repaired their finances, the European Central Bank said on Sunday.
Lloyds was the most heavily traded stock on the FTSE 100 relative to its average, trading 1.3 times its 90-day average volume.
"Large numbers of investors are involved in Lloyds and are looking for them to start paying a dividend at some point, but the more money that is needed to bolster their balance sheet, the less there is for dividends," Manoj Ladwa, the head of trading at TJM Partners, said.
"Especially when the UK seems to be moving ahead of Europe's economy, the expectation is that UK banks would've performed better than European ones. But Lloyds is a concern."
Aggreko (>> Aggreko plc) fell 2 percent, with traders citing a profit warning by fellow emergency-power supplier APR Energy (>> Apr Energy PLC) as behind the move.
(Editing by Toby Chopra)
By Alistair Smout
