Sterling gained momentum as investors hoped for a breakthrough with Brexit, putting pressure on the FTSE 100, which fell 0.5% to 7,179. Weak earnings from index heavyweights BHP and HSBC also dogged the index.
UK Prime Minster Theresa May will head to Brussels on Wednesday for a meeting with European Commission President Jean-Claude Juncker.
Investor sentiment in the US was cautious as investors awaited more news on the progress of US-China trade talks.
The Dow Jones was broadly unmoved at 25,908 at around 5pm UK time.
Brent crude oil slipped 0.5% to $66.16 per barrel. Copper climbed 2.4% $2.87 per pound and gold glittered at $1,335 per ounce.
LARGE AND MID CAP RISERS AND FALLERS
HSBC shed 4.3% to 634.7p as a 16% rise in annual profit missed market expectations and the bank warned that slowing growth in China and Brexit uncertainty could hurt its performance in the current year. The market had a negative read across to Standard Chartered, down 1.8% at 617.1p.
Mining giant BHP dipped 0.2% to £17.95 on reporting a fall in first-half profit, owing to lower copper prices and unplanned production outages.
Bakery chain Greggs was having a better morning, rising 11.2% to £17.81 as it upgraded its outlook on profit following an 'exceptionally strong start' to the year, driven by the launch of its vegan-friendly sausage roll.
InterContinental Hotels nudged 0.5% lower despite reporting rising earnings boosted by higher occupancy numbers in China, easing the blow from subdued US performance.
Bus operator FirstGroup gained 4.3% to 95.4p as it reported 13.7% growth in winter revenue amid a strong performance for its student bus segment.
Aerospace group Cobham settled a dispute with aircraft manufacturing giant Boeing, helping to lift the UK group's share price 4.9% to 121p.
Shares in RPC were broadly unmoved at 795.6p following reports that US company Berry Global was given a deadline by the Takeover Panel to decide whether or not to buy the firm.
SMALL CAP RISERS AND FALLERS
London-focused residential property developer Telford Homes added 0.3% to 340.5p after it exchanged contracts for the sale of a build-to-rent development site in Walthamstow.
Specialist manufacturer Synnovia slid 6.3% to 104p on warning that it expected rising annual revenue to be offset by losses from currency hedging, cost pressures and 'minor' delays at its films division.
Luxury furniture company Walker Greenbank slumped 14.6% to 73p after announcing that it only expected to eke out a modest increase in sales amid a challenging UK retail environment.
Insolvency litigation financing company Manolete Partners gained 8.4% to 295.5p as it said it expected to post annual results ahead of market expectations, with operating profit growth of 70%.
Patagonia Gold plunged 47.4% to 50p on news that it had ceased operations at two mines in Argentina due to lower-than-expected production volumes.