At 0840 BST, the FTSE 100 was down 0.2% at 6,998.60, while the pound was 0.2% firmer against the dollar at 1.1299.
CMC Markets analyst Michael Hewson said: "Markets are hoping that the coronation of Rishi Sunak as the next UK Prime Minister will help draw a line under the events of recent days, as the new PM elect warned his party that they needed to unite or die. This may prove to be a tall order, given the Tories propensity for fratricide over the years.
"Given recent events it’s likely that the old divisions may well reassert themselves in the coming days, as things settle down, or if the polls don’t improve, however given recent events it would be quite something to see an immediate rebound in the government’s political fortunes.
"The fall in UK gilt yields does suggest one thing and that is we will probably see a budget delivered next week and all the indications are it will be delivered by Jeremy Hunt, the existing Chancellor of the Exchequer. It would be highly unsettling for markets if Hunt was removed this close to Monday’s budget, however given the Tories recent propensity for shooting themselves in the face, anything is possible."
In equity markets, HSBC was under the cosh as it posted a 42% fall in third-quarter profits due to rising loan losses and assets sales. The bank also announced the appointment of Georges Elhedery, a former head of its investment bank, as its new chief financial officer.
HSBC reported a pre-tax profit of $3.15bn for the three months to 30 September, down from $5.4bn last year, but above the $2.45bn consensus of analyst estimates compiled by the bank.
Premier Inn owner Whitbread (LON:WTB) also fell despite saying it swung to an interim profit.
Genuit lost ground after saying it expects profit for the year to be at the lower end of analyst expectations as market turmoil hit trading at the end of the third quarter.
On the upside, retailers gained after a well-received update from e-commerce group THG (LON:THG), with B&M European Value Retailer, JD Sports, B&Q owner Kingfisher (LON:KGF) and Asos all up.
IT infrastructure services provider Softcat also pushed higher as it reported a rise in full-year profit and revenue, hailing good growth across all segments.
Market Movers
FTSE 100 (UKX) 6,998.60 -0.22%
FTSE 250 (MCX) 17,404.65 0.39%
techMARK (TASX) 4,160.79 0.27%
FTSE 100 - Risers
Pershing Square (NYSE:SQ) Holdings Ltd NPV (PSH) 2,850.00p 2.89%
Scottish Mortgage Inv Trust (SMT) 748.80p 1.96%
WPP (LON:WPP) 771.20p 1.55%
Haleon (HLN) 277.95p 1.55%
Flutter Entertainment (CDI) (FLTR) 10,930.00p 1.44%
Hargreaves Lansdown (LON:HRGV) (HL.) 751.00p 1.38%
B&M European Value Retail S.A. (DI) (BME) 309.70p 1.28%
3i Group (LON:III) 1,128.50p 1.17%
Experian (EXPN) 2,784.00p 1.13%
Airtel Africa (AAF) 126.40p 1.12%
FTSE 100 - Fallers
HSBC Holdings (LON:HSBA) 451.30p -5.01%
Whitbread (WTB) 2,544.00p -2.57%
Standard Chartered (LON:STAN) 551.80p -1.75%
Persimmon (LON:PSN) 1,257.50p -1.22%
Compass Group (LON:CPG) 1,821.50p -1.09%
Harbour Energy (HBR) 371.10p -1.04%
M&G (MNG) 176.85p -0.84%
Shell (LON:RDSa) (SHEL) 2,325.50p -0.83%
Rio Tinto (LON:RIO) 4,715.00p -0.74%
Prudential (LON:PRU) 798.60p -0.70%
FTSE 250 - Risers
Jupiter Fund Management (JUP) 100.40p 6.70%
Ferrexpo (FXPO) 113.30p 3.56%
Vietnam Enterprise Investments (DI) (VEIL) 530.00p 3.52%
Elementis (LON:ELM) 95.15p 3.42%
Paragon Banking Group (PAG) 417.40p 3.27%
ASOS (LON:ASOS) (ASC) 533.50p 3.09%
Hilton Food Group (HFG) 615.00p 2.84%
C&C Group (CDI) (CCR) 160.40p 2.82%
Baltic Classifieds Group (BCG) 141.40p 2.32%
Ascential (ASCL) 188.90p 2.16%
FTSE 250 - Fallers
Genuit Group (GEN) 261.00p -2.43%
Allianz (ETR:ALVG) Technology Trust (ATT) 222.00p -1.77%
Mitchells & Butlers (MAB) 103.70p -1.14%
International Distributions Services (IDS) 189.60p -1.02%
Redrow (LON:RDW) 407.60p -0.83%
Babcock International Group (LON:BAB) 268.20p -0.81%
Shaftesbury (SHB) 351.40p -0.79%
Quilter (QLT) 91.66p -0.74%
TUI (LON:TUIT) AG Reg Shs (DI) (TUI) 124.65p -0.72%
Countryside Partnerships (CSP (LON:CSPC)) 203.40p -0.68%
