The slide came after it was reported that China’s finance ministry had told local governments to quicken the pace of spending on construction projects in order to boost the slowing economy.
The FTSE 100 Index closed 26.78 points lower at 6,844.51 as jitters also surfaced over the extent of next week’s expected stimulus measures from the European Central Bank.
Lewis Sturdy, dealer at Capital Spreads, said: “The eurozone central bank has been tipped to cut rates and will look to deflect the threat of deflation. With the bulls and bears fully rested after this week, the meeting will prove pivotal to the direction of the markets.”
The economic uncertainty impacted on miners, with Anglo American down by more than 5 per cent or 87.5p to 1,457.5p and Rio Tinto off 131.5p at 3,057p.
Medical equipment firm Smith & Nephew remained in robust health despite an earlier denial from US rival Stryker about a potential takeover swoop. Shares were up by a further 2 per cent or 17p to 1,046p, the third day of steady gains after talk of a bid emerged.
Pub company Mitchells & Butlers was 1.5 per cent higher in the FTSE 250 Index amid speculation that it is set to consider the resumption of dividend payments. Shares were 6.1p up at 420.8p in a session when other leisure-based firms also did well. Premier Inn-owner Whitbread improved 48p to 4,186p, while betting shop firm Ladbrokes was up 2.2p to 152.6p.
Conveyor belt manufacturer Fenner was the biggest faller in the second tier after it issued a profits warning. Shares dived 10 per cent or 39.7p to 350p.