The FTSE 100 has rallied strongly on positive manufacturing data from China, as well as the prospect of Vodafone's deal to sell its holding in Verizon Wireless.
Fixed income managers have cautioned the Bank of England (BoE) will be forced to backtrack on its forward guidance measures as it has been too pessimistic over the state of the UK economy.
London's leading share index had lost 1% by mid-afternoon, weighed down by weaker than expected manufacturing and services data in the eurozone.
Investors ask whether falling Chinese housing starts could trigger end of commodity super-cycle.