The FTSE 100 Index closed 1% lower today as jittery investors reacted to a lacklustre start to trading in New York.
London's benchmark index swung between positive and negative territories for most of the session, reflecting continued uncertainty after Friday's job numbers in the United States raised recession fears for the world's largest economy.
By the close, the Footsie stood 57.1 points lower at 6134.1, with the poor start on Wall Street being blamed for the late sell-off. Sentiment for US stocks remained fragile, particularly ahead of the anniversary of the September 11 terrorist attacks.
Property firms were among the stocks caught in London's retreat, with Hammerson down 40p at 1182p and British Land off 38p at 1187p.
Plumb Center and Build Center chain Wolseley, which generates a large slice of its profits from the United States, fell almost 4%, or 35p at 928p.
Kingsmill bread owner Associated British Foods was near the top of the Footsie fallers board after it said the rising cost of wheat would continue to put pressure on its bakeries division. The firm also warned that increased competition and discounting at clothing chain Primark was likely to impact margins at the division, offsetting recent sales growth. The stock was 3% lower, off 28.5p at 808.5p.
Other fashion retailers were affected by the Primark update, particularly with Next due to publish figures on Tuesday. Marks & Spencer slipped 12p to 602p, while Next was 18p lower at 1861p.
Broadcaster ITV featured on the risers board amid speculation of better than expected advertising revenues for ITV1, the company's flagship channel. The improvement of 2.2p to 111.3p came ahead of an update on ITV's strategy by executive chairman Michael Grade on Wednesday.
Engineering group Smiths was also on the front foot, ahead 6p to 981p after an upgrade from Morgan Stanley.
However, a number of stocks gave back gains seen earlier in the session. They included banking group Barclays, which initially rose 2% after president Bob Diamond told a conference in New York that Barclays Capital had traded profitably in August, despite the difficult market conditions.
Shares were later 2.5p lower at 580p, alongside a drop of 3p to 870p for HSBC and a fall of 7.5p to 871.5p for Halifax Bank of Scotland.
Meanwhile, utility groups Kelda and Severn Trent both held gains amid speculation over consolidation in the water sector. Kelda rose 13p to 852p and Severn was 1p higher at 1320p.
One of the biggest gains in the FTSE 250 Index came from Sports Direct International, up 1.25p at 137.25p after a trading update quelled fears over the need for analysts to consider more profits downgrades at the Sports World retailer.
The biggest Footsie risers were ITV up 2.2p at 111.3p, British Energy ahead 8.5p at 476.5p, Kelda Group up 13p at 852p, Rentokil Initial ahead 1.5p at 171.8p.
The biggest fallers were Invesco down 21.5p at 557p, Wolseley off 35p at 928p, Associated British Foods down 28.5p at 808.5p and Hammerson off 40p at 1182p.