Sharecast - At 1200 BST, the FTSE 100 was down 1.37% at 7,340.45.
In parallel, the yield on the benchmark 10-year Gilt was climbing nine basis points to 4.585% and just a shade below its 52-week highs.
Ten-year US Treasury yields meanwhile were bumping up against the 4.0% mark.
Victoria Scholar, head of investment at Interactive Investor, said: "Treasury yields and the US dollar made gains after minutes from the Fed’s June meeting [which were released overnight] suggested further tightening is to come from. The FOMC minutes were largely interpreted as hawkish by the markets, even though the pace of tightening is likely to slow, and rates were left unchanged last month. The central bank said the economy faces ‘headwinds from tighter credit conditions’."
Investors were also waiting on a batch of fresh reports on the state of the US jobs market that were due out on Thursday.
They would be followed the next day by the all-important monthly non-farm payrolls report.
In equity markets, online supermarket Ocado (LON:OCDO) was under the cosh after Morgan Stanley (NYSE:MS) cut its price target on the shares to 390p from 430p ahead of first-half results.
Electrical retailer Currys tanked 12% after it pulled its final dividend, citing an uncertain outlook as annual profits fell due to its poorly-performing Nordics division but came in at the top end of guidance.
Office provider Workspace (LON:WKP) was in the red despite reporting reported a rise in first-quarter rents, driven by resilient demand, as it traded without entitlement to the dividend. Next and JD Sports were also ex-dividend.
In other broker note action, RBC Capital Markets upgraded Smiths Group (LON:SMIN) to ‘sector perform’ from ‘underperform’, yet the shared were drifting lower.
JPMorgan (NYSE:JPM) upgraded Smurfit Kappa and Mondi (LON:MNDI) to ‘overweight’ from ‘neutral’.
Market Movers
FTSE 100 (UKX) 7,341.81 -1.35%
FTSE 250 (MCX) 18,163.49 -1.25%
techMARK (TASX) 4,335.81 -1.14%
FTSE 100 - Risers
United Utilities Group (UU.) 949.80p 1.82%
Centrica (LON:CNA) 123.60p 0.45%
Severn Trent (LON:SVT) 2,456.00p 0.24%
BAE Systems (LON:BAES) (BA.) 912.20p 0.15%
Tesco (LON:TSCO) 248.60p -0.08%
Sage Group (LON:SGE) 907.60p -0.09%
National Grid (LON:NG.) 1,026.50p -0.10%
Lloyds Banking Group (LON:LLOY) 43.77p -0.14%
SSE (LON:SSE) 1,783.00p -0.36%
Sainsbury (J) (SBRY) 268.90p -0.41%
FTSE 100 - Fallers
Flutter Entertainment (CDI) (FLTR) 14,790.00p -3.55%
Glencore (LON:GLEN) 441.95p -3.49%
Fresnillo (LON:FRES) 601.00p -3.38%
Antofagasta (LON:ANTO) 1,421.50p -3.30%
Land Securities Group (LAND (LON:LAND)) 578.20p -3.25%
Next (NXT) 6,730.00p -3.22%
Frasers Group (FRAS) 680.50p -3.20%
Ocado Group (OCDO) 555.40p -3.14%
Abrdn (ABDN) 213.30p -2.91%
Kingfisher (LON:KGF) 221.20p -2.90%
FTSE 250 - Risers
Man Group (EMG) 224.30p 2.89%
Lancashire Holdings Limited (LRE) 578.00p 1.67%
Drax Group (LON:DRX) 581.40p 1.15%
BH Macro Ltd. GBP Shares (BHMG) 369.50p 1.09%
Domino's Pizza Group (DOM) 278.40p 1.09%
Apax Global Alpha Limited (APAX) 185.40p 0.98%
Just Group (JUST) 77.10p 0.92%
C&C Group (CDI) (CCR) 133.00p 0.91%
Victrex (LON:VCTX) plc (VCT) 1,430.00p 0.56%
Discoverie Group (DSCV) 839.00p 0.48%
FTSE 250 - Fallers
Currys (CURY) 47.16p -11.77%
Primary Health Properties (PHP) 93.30p -4.45%
Ferrexpo (LON:FXPO) 90.00p -4.36%
Big Yellow Group (LON:BYG) 1,045.00p -4.04%
IWG (IWG) 133.20p -3.69%
Workspace Group (WKP) 477.00p -3.64%
Wizz Air Holdings (LON:WIZZ) 2,679.00p -3.49%
Molten Ventures (GROW) 257.20p -3.31%
Essentra (ESNT) 159.20p -3.28%
Me Group International (MEGP) 162.60p -3.21%