Construction sector woes pull FTSE down 55.6 points
The London market was dragged into the red after a gloomy economic update from Britain's construction industry dealt a punishing blow to housebuilders.
The FTSE 100 Index was 55.6 points lower at 6,522.3 after Charles Church owner Persimmon plummeted more than 6% following the update, which revealed the construction sector experienced its worst month for seven years during the run-up to the EU referendum.
The closely watched Markit/CIPS construction purchasing managers' index (PMI) recorded a worse-than-expected 46.0 in June, down from 51.2 in May and well below economist expectations of 50.6. A reading above 50 indicates growth, while anything below is considered contraction.
The sharp fall was driven by a "steep decline" in house building and the first decrease in commercial construction work since May 2013.
Tim Moore, senior economist at Markit, said the speed of the downturn in the days leading up to the Brexit vote provided "a clear warning flag for the wider post-Brexit economic outlook".
The British Land Company was the biggest faller, off 7% or 43.5p to 565p, while Barratt Developments slipped 6% or 26.7p to 388.3p.
Across Europe, Germany's Dax was 0.7% lower and the Cac 40 in France edged down 0.9% as the markets awaited further clarity on Britain's future outside the European Union.
On the currency markets, the pound was up 0.2% against the dollar at 1.329 as it shrugged off earlier falls triggered by the poor data from Britain's construction sector.
The pound was also up 0.1% against the euro at 1.193.
Mining and precious metal stocks were leading the charge on London's top-flight index, with silver miner Fresnillo up 135p to 1895p and Glencore climbing 6.8p to 162.8p.
Tony Cross, market analyst at Trustnet Direct, said: " Rising metals prices have ensured that the miners find themselves at the top of the chart today, while the prospect of low interest rates is propelling the precious metals stocks squarely to the top of the board."
However, oil stocks were struggling to make headway after coming under fire from a slump in the price of Brent crude.
The price of oil slipped 0.3% or 17 cents to 50.18 US dollars a barrel despite signs from Asia that demand was starting to slow. Royal Dutch Shell B fell 30p to 2065.5p.
In stocks, supermarket giant Sainsbury's was off 5.2p to 230.9p after announcing it would end a joint venture with budget supermarket Netto, which would result in the closure of 16 stores and put 400 jobs at risk.
Staff will go through a consultation in the coming weeks, with the supermarkets expected to close in August. It is understood Sainsbury's will try to redeploy affected staff where possible.
The joint venture with Netto's Danish owner Dansk was created on a trial basis in 2014, as Sainsbury's looked to take on discount rivals Aldi and Lidl.
The London Stock Exchange also helped lead the market lower after shareholders voted overwhelmingly to approve a proposed £21 billion merger with Germany's Deutsche Borse, despite Britain voting to leave the European Union.
Shares were down 30p to 2493p.
The biggest risers on the FTSE 100 were Fresnillo up 135p to 1895p, Randgold Resources up 385p to 9160p, Glencore up 6.8p to 162.8p, Antofagasta up 11p to 480.6p.
The biggest fallers were British Land Company down 43.5p to 565p, Persimmon down 105p to 1435p, Barratt Developments down 26.7p to 388.3p, Berkeley Group down 169p to 2485p.