Ongoing concerns about a slowdown in China were also weighing on markets early on, with banking and mining shares bearing the brunt of a reduction in risk appetite.

The FTSE 100 was trading 0.5% lower at 6,823 within the opening hour of trade.

Jonathan Sudaria, a dealer at Capital Spreads, said that bulls were taking “a breather” after European equities posted new multi-year highs last week.

“As evidenced by the lack of volatility, there aren’t any clear catalysts for traders to get their teeth into and back up their convictions with big trades. Until something happens to end this state of apathy, expect markets to continue drifting,” he said.

Over in China a report from the real estate sector revealed property prices dropped last month. According to the National Bureau of Statistics, eight of the country’s cities saw a monthly decline in the average commercial house price, compared to the four which saw a fall in March.

Comments from Bank of England Governor Mark Carney were also in focus after he expressed concerns about the housing market over the weekend. He said that rising house price pose the biggest risk to the UK recovery and suggested that the government’s Help-to-Buy scheme may need to be adjusted.

Meanwhile, investors were looking ahead to Sunday’s Presidential elections in Ukraine. Any delay or failure of the above could trigger so-called “stage three” sanctions co-ordinated with the US, according to analysts at Barclays Research. This could push Russia into a severe recession and lead to retaliatory moves.

AstraZeneca plummets after rejecting Pfizer’s last-ditch attempt

Shares in AstraZeneca, which have risen strongly over the past month, dropped 14% this morning after the board rejected a sweetened £55-a-share bid from Pfizer. The new offer is thought to value AstraZeneca at around £69bn but was only a “minor improvement” on previous proposals, according to Chairman Leif Johansson.

Pfizer said this is a “final proposal” and would not be increasing it any further, as it called on AstraZeneca shareholders to urge the latter’s board to begin “substantive engagement”. It said it would not pursue a hostile offer and would only announce another offer with the recommendation of AstraZeneca’s board.

Mining stocks were mostly lower this morning on China slowdown fears with Rio Tinto, BHP Billiton and Anglo American among the worst performers.

Banking peers Barclays, Standard Chartered, Lloyds and HSBC were also out of favour.

Specialty chemicals group Alent gained strongly after maintaining its outlook for the full year despite adverse currency movements. The company said that trading since the start of 2014 has been in line with expectations with a “slight increase in demand” being noted across the main electronics and automotive end-markets.

easyJet and IAG were flying higher after figures from airline peer Ryanair as it posted a less-than-expected 8% drop in annual profits and forecast a strong first half of the new financial year.

FTSE 100 – Risers
easyJet (EZJ) 1,557.00p +2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 367.00p +2.43%
Next (NXT) 6,495.00p +1.48%
Meggitt (MGGT) 468.90p +1.41%
Travis Perkins (TPK) 1,652.00p +1.41%
Mondi (MNDI) 1,007.00p +1.21%
London Stock Exchange Group (LSE) 1,801.00p +1.18%
Compass Group (CPG) 1,002.00p +1.16%
Shire Plc (SHP) 3,304.00p +1.16%
St James’s Place (STJ) 748.00p +1.15%

FTSE 100 – Fallers
AstraZeneca (AZN) 4,140.00p -14.17%
Sainsbury (J) (SBRY) 341.00p -1.93%
Rio Tinto (RIO) 3,232.50p -1.64%
Barclays (BARC) 238.15p -1.41%
Vodafone Group (VOD) 214.85p -1.06%
GlaxoSmithKline (GSK) 1,626.50p -1.03%
BHP Billiton (BLT) 1,938.00p -0.77%
Morrison (Wm) Supermarkets (MRW) 211.30p -0.75%
Standard Chartered (STAN) 1,326.00p -0.75%
Aviva (AV.) 509.50p -0.68%