A round of profit-taking took the shine out of global stocks on Thursday, sending the FTSE 100 into the red.
London’s blue chip index ended the day down 0.5% or 40.51 points at 7,502.69 points, but fared better than its continental peers.
Across Europe, the French CAC 40 and German DAX closed the session lower by 0.5% and 0.8%, respectively.
David Madden, a market analyst at CMC Markets UK, said: “European equity markets are lower today as weakened global sentiment encouraged profit-taking.
“Some major European indices hit their highest levels since February yesterday, and investors are now locking in some profits.
“Traders took their cues from Asia overnight and decided to exit the equity markets, partially driven by higher yields on government bonds.”
Japan’s NIKKEI 225 and Hong Kong’s Hang Seng closed lower by 0.1% and 1.3%, respectively, while the sea of red hit also Wall Street at the market open on Thursday.
The Dow Jones Industrial Average, S&P 500 and NASDAQ Composite were all down by more than 1% in early trading.
In currency markets, the pound was also taking a hit, down 0.1% against the US dollar at 1.356 and falling 0.2% versus the euro to 1.133.
Investors were digesting services sector data which pointed to a “modest” rebound in activity in April following snow storm disruption in March.
The closely watched Markit/CIPS services purchasing managers’ index (PMI) showed a reading of 52.8 in April, up from 51.7 in March but falling short of economists’ expectations for 53.5.
In oil markets, Brent crude prices were flat at around 73.07 US dollars per barrel, with prices subdued after data showed a surge in US oil and gas stockpiles earlier this week.
In UK stocks, Smith & Nephew fell 98p to 1,302.5p after warning on its full year sales outlook in the wake of a mixed performance in the first quarter, with underlying revenues falling flat.
J Sainsbury shares dropped 3p to 302p after chairmen of the Business and Environment committees wrote to the competition watchdog over the supermarket’s £12 billion merger with Asda amid concerns that the deal will create “local monopolies” in the UK.
Esure rose 2.2p to 226p, as investors shrugged off an £8 million hit linked to the freak weather in March and instead focused on news that the insurer remained on track to deliver profitable growth when adjusting for weather-related costs.
Trinity Mirror fell 1p to 85.5p despite saying it was confident that its £126.7 million deal to buy the Daily Express and the Daily Star did not pose any competition or media plurality issues, though the acquisition is now facing Government intervention.
An Ofcom survey which found TalkTalk to be the worst performer for customer service among broadband providers sent shares down 2.2p to 132.8p, while below-average scores for the likes of Vodafone sent its own stock price lower by 3.7p to 208.95p.
WizzAir rose 58p to 3,283p on news that the airline had secured a British air operator certificate and set up a UK subsidiary as part of its Brexit contingency plans.
The biggest risers on the FTSE 100 were Evraz up 14p at 490p, Randgold Resources up 140p at 6,108p, TUI up 24.5p at 1,723p, and Fresnillo up 16.5p at 1,296.5p.
The biggest fallers on the FTSE 100 were Smith & Nephew down 98p at 1,302.5p, Mondi down 141.5p at 1,894.5p, BT Group down 10.10p at 232.15p, and Kingfisher down 11.8p at 278.8p.