By Atul Prakash and Alistair Smout
LONDON (Reuters) - Britain's top share index surrendered its earlier gains and edged lower in late trading on Monday, with commodity shares coming under severe pressure after prices of crude oil and metals slipped.
The UK Oil and Gas (FTNMX0530) and the mining (FTNMX1770) indexes fell 3.9 percent and 1.5 percent respectively after crude oil prices hit their lowest in nearly seven years after OPEC's meeting ended in disagreement over production cuts and as metals prices fell on a stronger dollar.
Shares in Royal Dutch Shell (L:RDSa), BG Group (L:BG), BP (L:BP), BHP Billiton (L:BLT) and Antofagasta (L:ANTO) fell 2.2 to 4.3 percent.
"OPEC seems to be fragmenting now, with an air of 'every member for itself' prevailing," Mike van Dulken, head of research at Accendo Markets, said.
"Without the protection of big producers like Saudi Arabia, smaller exporters will have little choice but to ramp up production, even if to do so would be counter-productive for the oil price."
The blue-chip FTSE 100 index (FTSE) was down 0.2 percent at 6,224.34 points after rising to a high of 6,287.23 points earlier in the day. It shed 2.8 percent in the last two sessions of last week, which took the index to its lowest level since mid-November.
The index posted its biggest loss since Sept. 28 on Thursday after European Central Bank President Mario Draghi announced stimulus measures that fell short of what was expected.
Having fallen less than European indexes last week, the FTSE 100 lagged a stronger recovery in continental shares, which gained around 1 percent.
Traders said that the index might hover within a recent 200 point range, with trade subdued before a long-awaited U.S. Federal Reserve meeting next week.
"The ECB did want the markets wanted, but they didn't do half as much as the markets wanted ... (and now) we're in a little bit of a no-man's land, waiting for the Fed's decision," Alastair McCaig, market analyst at IG, said.
Among mid-caps, Entertainment One Ltd (L:ETO) slumped 12 percent after Canaccord Genuity cut its target price for the stock to 284 pence from 323 pence and N+1 Singer lowered its target price to 181 pence from 185 pence.
British outsourcing company Serco (L:SRP) fell 3.5 percent after warning that revenue and trading profit would fall in 2016, due to the sale of a call centre business and some lost contracts.