Update: The FTSE 100 has swung into gains, rising above the 7,000 mark as precious metals miners and recovering tobacco stocks provided a boost.
The UK blue-chip index was up six points at 7,001, having spent the bulk of the morning in the red.
Tobacco stocks meanwhile added support, amid sings of a tentative recovery from Friday's lows on fears over a US clampdown on the levels of nicotine allowed in cigarettes.
(10:52) FTSE mired below 7,000
The FTSE 100 has remained mired below the 7,000 mark breached late on Friday, as investors remain nervous following last week's heavy sell-off.
The UK blue-chip index fell 25 points, or 0.4%, to 6,970, having closed below the 7,000 mark on Friday as a relief rally petered out.
'Having seen some big losses on Thursday in Europe we started with a strong and positive open on Friday, however the failure to hold onto any of these gains should be a concern to all of those who feel that we could be near a short-term base, as we start a new week,' said Michael Hewson, chief market analyst at CMC Markets UK.
Investors bid up the price of the perceived safe haven 1.3% to $1,231.85 an ounce.
The pound meanwhile lost ground against the dollar, down 0.1% at $1.314 as Brexit negotiations appeared to hit an impasse before a crucial European Union summit later this week.
On the FTSE 250, shares in Convatec (CTEC) crashed 29.6% to 157.9p as the medical devices maker issued a profit warning and announced the departure of chief executive Paul Moraviec.
The group said full-year revenue growth was likely to rise by 1% at most, versus earlier forecasts of up to 3%.
'This is a lot of unexpected news for the market today,' said Ian Forrest, investment research analyst at The Share Centre.
'While three of the company's four divisions saw revenue growth in the third quarter, the fact that the company is now looking for a new chief executive and faces other challenges means that investors should expect the shares to remain volatile for some time to come.'
Shares in Superdry (SDRY) were meanwhile down 21% at 802p as the fashion retailer warned full-year profits would full short of market expectations, blaming the summer heatwave.
'Superdry's weather-related warning today could lead to significant questions over the true strength of its brand,' said Russ Mould, investment director at AJ Bell.
'There has to be a risk that fickle shoppers are simply growing tired of its faux-Japanese styling.