The FTSE 100 Index closed 30 points lower at 5,662.6 today amid further evidence that the eurozone debt crisis is sapping confidence across the globe and China cut its interest rate for the second time in a month.
International Monetary Fund (IMF) head Christine Lagarde added to worries, saying the IMF’s forecast on global economic growth would be cut next month.
Heavily-weighted miners were among the biggest fallers in the Footsie, with Evraz down 11.6p to 246.2p and Kazakhmys off 33p at £7.25.
The banking sector continued to suffer in the wake of the Libor-fixing scandal.
Barclays was down 3.5p to 164.8p, while Royal Bank of Scotland and Lloyds Banking Group were 5.7p lower at 201.5p and 0.5p at 30.3p respectively.
Retailer Marks and Spencer was 3% lower, down 11.2p at £3.18, amide expectations of a downbeat trading update next week.
Other big Footsie fallers included CRH down 63p to £11.51 and Weir Group 68p lower at £15.47.
Insurer Aviva was among the biggest risers – up 3.4p to £2.88 – after it sold half its stake in Dutch rival Delta Lloyd for £318million as part of a major turnaround plan.
International Consolidated Airlines rose 3.5p to 159.2p, SSE was ahead 22p at £14.16, Imperial Tobacco lifted 40p to £25.79 and Pennon Group added 11p to £7.70.
In the FTSE 250, construction group Carillion slumped 6%, off 16.5p to 251.4p, after a broker downgrade.
Elsewhere paving stone maker Marshalls fell 8%, dropping 6.9p to 80p, after it reported a £10million sales hit from the rainy weather seen since April.
Cast iron cooker firm Aga Rangemaster was also in the red – down 5.1p to 66.5p – after it said first half profits would be worse than expected.
Alan MacPhee, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, highlighted AG Barr adding 0.9% to 425.45p and Hunting falling 2.32% to 736.5p.