The London market tumbled this morning due to fears over low oil prices, though supermarket Tesco saw its shares surge after better-than-expected Christmas trading.
The FTSE 100 Index fell 1.4%, or 80.3 points, to 5879.1, after Brent Crude fell below 30 US dollars a barrel before later recovering.
Overnight the Dow Jones Industrial Average plunged more than 2% amid declining oil prices.
The fall in the Footsie reverses two days of gains, after a torrid period last week, which saw £85 billion wiped of top-flight shares due to a run of poor economic data and interruptions to trading on Chinese markets.
Tesco posted a third-quarter sales dip of 1.5% but said figures were up over the Christmas period and were at the upper end of forecasts. Shares jumped 5%, or 7.9p, to 166.3p.
Analysts at Bernstein said recent trading at the supermarket “suggests that the company is well on the way to recovery”.
Argos owner Home Retail Group warned over profits after it said the chain suffered falling sales amid “mixed” trading over Christmas.
Home Retail – which on Wednesday night revealed talks to sell its DIY arm Homebase and rejected a takeover approach for the wider business from Sainsbury’s in November – posted a 2.2% fall in sales at established Argos stores for the 18 weeks to January 2.
But shares lifted 4.2p to 153.6, as analysts cheered its plan to sell Homebase to Australian retail giant Wesfarmers for £340 million.
Elsewhere JD Sports lifted almost 5%, or 47p, to 1105p, after it said like-for-like sales in the five weeks to January 2 jumped 10.6%, and that it now expected full-year profits before tax to beat forecasts of £136 million by up to 10%.
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