Tesco and Unilever shares down amid product prices row
Investors punished Tesco and Unilever as the two blue-chip giants squared off over a jump in product prices triggered by the weakness of the pound.
Shares in the companies dropped more than 3% after Britain's biggest supermarket was left grappling with a shortage of store cupboard staples - Marmite, Pot Noodle and Persil - after reportedly refusing to bow to Unilever's demands for a 10% price hike.
The FTSE 100 Index was rooted in the red, dropping 46.27 points to 6,977.74, as Tesco dropped 6.1p to 195.1p and Unilever fell 127p to 3,596.5p.
Connor Campbell, financial analyst at Spreadex, said: "Love it or hate it, Marmite has made an unlikely stir on the markets this Thursday, as a battle between Tesco and Unilever sees the Brexit make its entrance into the supermarket price war."
"It's a sign that sterling's current Brexit-drag is only going to put even more pressure on a supermarket sector already engaged in a margin-slashing price war, and is another tangible example of Britain's choice to leave the EU affecting the average person on the street."
London-listed mining giants were also weighing on the top-flight after fresh economic data from China showed exports sunk 10% in September compared to the same month in 2015.
Shares in Anglo American and Rio Tinto were off 49.9p to 990.6p and 131.5p to 2,576p respectively, as investors fear China's insatiable appetite for commodities could tail off if economic growth eases.
On the currency markets, the pound stabilised against the US dollar, remaining flat at 1.219 US dollars, while sterling edged 0.3% lower against the euro at 1.104 euro.
Sterling has lost around 18% of its value against the US dollar since the Brexit vote and endured a torrid time on the currency markets last week after investors became increasingly alarmed that Prime Minister Theresa May was seeking to break free of the European single market by opting for a "hard Brexit".
Across Europe, Germany's Dax and the Cac 40 in France both closed down 1%.
The price of oil rose 0.3% to 51.94 US dollars a barrel despite remaining under pressure during the session as data from across the Atlantic showed the first rise in US crude inventory levels for six weeks.
In UK stocks, housebuilders pushed ahead as investors cheered a closely-watched report revealing home buyer demand was picking up.
The Royal Institution of Chartered Surveyors (Rics) said a balance of 8% more chartered surveyors reported an increase in buyer inquiries rather than a decrease in September.
Barratt Developments rose 9.2p to 483.2p, while Persimmon climbed 32p to 1,723p.
Away from the top-tier, WH Smith was up nearly 4% during the session before paring gains as the r etailer hailed its best annual sales for 14 years.
Shares in the FTSE 250 firm climbed 7p to 1,532p, as it was boosted by surging demand for food on the go across its stores based in airports and train stations.
The chain said it sold more than 10 million meal deals over the year to August 31, helping drive a 4% rise in like-for-like sales in its travel arm.
The biggest risers on the FTSE 100 Index were United Utilities up 25.5p to 940.5p, Intu Properties up 6.9p to 290.2p, British Land Company up 13.5p to 595.5p, and Hammerson up 12p to 564.5p.
The biggest fallers on the FTSE 100 Index were Standard Life down 17.7p to 331.2p, Rio Tinto down 131.5p to 2,576p, Anglo American down 49.9p to 990.6p, and Prudential down 67.5p to 1,382p.