Early year optimism faded further on Thursday as London stocks drifted lower on the back of a poor session for housing firms and miners.
Downbeat trading in the US from Tuesday weighed on traders throughout the session, while the FTSE was also impacted by a rise in the pound.
The FTSE 100 finished the day down 83.41 points, or 1.07%, at 7,747.29.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have taken their cues from last night’s weak US finish opening and traded sharply lower as the early year optimism starts to run into a little bit of turbulence, and some profit taking, with the Dax and FTSE 100 both slipping to one week lows.
“Today’s biggest fallers have included house builders after the latest RICS house price balance survey falls further into negative territory from -26% in November to -42% in December.
“A sharp reversal in copper prices is also weighing on the basic resources sector, pulling the likes of Antofagasta, Anglo American and Glencore.”
Elsewhere in Europe, the Dax dipped 1.72% by the end of the session and the French Cac finished 1.7% lower.
In the US, the main markets continued their decline, albeit at a softer rate, as weekly jobless claims fell to their lowest levels since September last year.
Meanwhile, sterling nudged higher after another spell of weakness for the US dollar.
The pound was up 0.14% against the dollar at 1.236 and was 0.03% higher against the euro at 1.144 at the close.
In company news, Dr Martens plummeted in value after the bootmaker and fashion firm said unseasonably warm weather last autumn and problems at a warehouse have eaten into its performance in the US.
The company downgraded its outlook for the financial year after what boss Kenny Wilson said had been a “challenging” period.
Investor sentiment, therefore, took a downturn and shares finished the session 64.3p lower at 144.9p.
Elsewhere in retail, Hotel Chocolat shareholders welcomed a sweeter update as the chocolate chain revealed plans to open more shops after a strong performance by UK stores.
The company said that UK and Ireland stores witnessed like-for-like growth of 10% over the nine weeks to Christmas Day.
It closed 23p higher at 208.5p on Thursday.
Boohoo shares dipped again after the fast fashion business reported lower sales over the final months of 2022.
The retailer said that its UK and US units had driven an 11% fall in sales across the group in the four months to the end of December. Boohoo shares declined by 4.96p to 42.41p as a result.
The price of oil tipped higher after IEA’s Fatih Birol said that energy markets could be tighter in 2023 as demand picks up.
Brent crude oil increased by 0.68% to 85.56 US dollars (£69.20) per barrel when the London markets closed.
The biggest risers in the FTSE 100 were Entain, up 36.5p at 1,482p, Severn Trent, up 59p at 2,802p, Beasley, up 11.5p at 646p, United Utilities, up 15.5p at 1,040.5p, and Hiscox, up 16.5p at 1,121p.
The biggest fallers of the session were Ocado Group, down 54p at 707.8p, Persimmon, down 81p at 1,379p, Hargreaves Lansdown, down 42.4p at 887.4p, Antofagasta, down 76.5p at 1,723p, and Berkeley, down 173p at 4,189p.