Blue-chip banks like Lloyds and Barclays and housebuilders skidded, dragging the FTSE 100 0.5% lower. "On balance I feel the situation here is still fairly unpredictable... I think it's far from clear we have a pathway yet," said Paul O'Connor, head of the UK-based Multi-Asset Team at Janus Henderson.
The main index was also hurt by a drop in miners after disappointing imports and exports data from top metals consumer China. Mid-cap Sophos Group scaled its highest level in more than a year at 586.8 pence, after private equity firm Thoma Bravo said it would take the company private in a 583 pence per share deal.
Shares of its peer Avast also rose 2.6%. Sentiment around the US-China trade situation also tempered somewhat after a rally in global stocks last week on signs of progress in negotiations that culminated with President Donald Trump outlining the first phase of a deal and suspending a threatened tariff hike.
"We welcome it but it's a very fragile truce. The fact that it wasn't written down is the most important thing. It shows what a challenge it is to converge on a hard agreement," O'Connor said. Ad firm WPP, which lost 4% in the previous session after French rival Publicis cut its sales view for the second time, ended 2.8% higher.
Royal Mail, relegated to the FTSE 250 earlier this year, slipped 2.4% after a report that the company was facing the threat of an employee strike over Christmas. Car dealership chain Pendragon, whose stock has nearly halved in value this year, climbed 10%. Automotive News reported Pendragon had named interim Executive Chairman and former AutoNation COO Bill Berman as interim CEO.