The FTSE 100 closed down 54.43 points at 7533.55. German and French markets were flat, while the US Dow Jones was up 124.8 points to 26,201.7 in early trading.
Brent crude was at $68.70 a barrel and the pound was at $1.42 against the dollar.
‘In London the initial rally was given up without much of a fight, and again one of the chief culprits is sterling strength.’ Chris Beauchamp, chief market analyst at IG.
‘Almost half the rally from the December lows of 7300 has been given back, and while the selling may continue for a few days more, there are bound to be more than a few bargain hunters sniffing around the index.
‘There is still no sign of that great dollar rally that everyone was expecting. The dollar index is off the highs of the week, with the previous narrative reasserting itself.
David Madden, market analyst at CMC Markets, ‘Shares in Capita Group crashed today after the company issued a profit warning, suspended its dividend and revealed plans to raise £700million via a rights issue.
‘The outsourcing company stated that cutting costs and disposing of non-core assets won’t be enough to make up the difference to pay down debt.
‘The company has already been improving its debt to equity ratio, and if it can raise the funds required and focus on few core businesses it stands a chance of surviving this turbulent time.
‘British homebuilders are feeling the pinch today after the government could rescind planning permission on land that isn’t being developed.
‘The move is seen as a way for Westminster to encourage house builders to speed up their rate of building houses in order to ramp up the supply of new houses. Some construction companies have been criticised for sitting on land banks and developing the sites in their own time, all the while there is a housing shortage going on in some parts of the country.
‘Shares in Persimmon, Taylor Wimpey and Barratt Developments are lower on the day.’
Healthcare stocks fell in the wake of yesterday’s news that Amazon, Berkshire Hathaway and JPMorgan are launching a joint venture in the sector.
Shire and Astrazeneca were two of the worst performers, down 99p at 3,327.5p, and 127.5p at 4,886.5p, respectively.
Marks & Spencer shares dropped 3.8p to 301.3p as the retailer revealed plans to close 14 stores as part of a restructuring programme that will put 450 jobs at risk.
High street chains have been hammered by Brexit-fuelled inflation that has sent the cost of goods rocketing and consumer confidence plummeting, while also having to stomach hefty business rate increases.
Shares in outsourcing giant Capita crashed 48 per cent or 165.3p to end the day at 182.5p after it warned over profits and announcing an investor cash-call as part of a major overhaul.
New chief executive Jonathan Lewis, who took up the role on December 1, admitted the group had
The biggest risers on the FTSE 100 were Johnson Matthey up 152p at 3,460p, BAE Systems up 10.2p at 594p, Rolls-Royce Holdings up 12.6p at 872p, and Segro up 7.4p at 581.4p.
The biggest fallers on the FTSE 100 were Shire down 99p at 3,327.5p, Persimmon down 69p at 2,502p, Barratt Developments down 15.6p at 585.2p, and Astrazeneca down 127.5p at 4,886.5p.