Turkey's lira pulled back from a record low to the dollar in morning trading after the central bank pledged to provide liquidity and cut reserve requirements for Turkish banks, but the currency's meltdown is still a major worry for emerging markets and beyond.

At 0856 GMT, the FTSE 100 was down 0.5 percent, slightly more than its European peers where the STOXX 600 lost 0.3 percent, France's CAC 40 0.2 percent and Germany's DAX 0.5 percent.

"The (lira) currency's travails and the timid response by the authorities has cast a dark cloud over European equities this morning, with the downbeat mood from Friday still pervading", said Neil Wilson, a market analyst at Markets.com.

European travel stocks were hard hit with TUI posting the worst performance of the British blue chip index, with a 4.3 percent fall.

Thomas Cook also lost 2.4 percent and EasyJet retreated 1.4 percent.

Amid midcaps, fund management group Ashmore fell the most, down 5.2 percent.

"Ashmore is widely seen as the London-listed bellwether for emerging markets and its shares are unsurprisingly being sold off in the wake of the crisis in Turkey", said Russ Mould at AJ Bell.

Elsewhere in the mid-sized listed firms segment, shares of British shipping services provider Clarkson jumped 8.5 percent after publishing its first-half results.

Among smaller companies, DP Eurasia, operator of the Dominos Pizza franchise in Turkey, fell 12.1 percent.

It was, however, Chemring Group which fell the most among small caps, down 16.1 percent, after an explosion at a  military hardware factory near Salisbury left one person dead on Friday.