Britain's top share index shed almost 1.5 percent on Tuesday, with lower oil prices knocking oil heavyweights and analysts forecasting a gloomy outlook for the direction of stocks like Vodafone and Alliance & Leicester.
But well-received figures from Royal Bank of Scotland and British American Tobacco provided some support.
The FTSE 100 closed down 84.4 points, or 1.4 percent, at 5,791.5 points, its biggest one-day point fall since October 19 and its weakest finish since February 15.
The index has set successive 4-1/2 year highs this year, but strategists are growing more cautious on the outlook for UK equities.
"We are not expecting a vintage year," said Jeremy Batstone, director of private client research at Charles Stanley, citing the ongoing plight of the UK consumer as a key drag on sentiment. Charles Stanley has a year-end FTSE target of 5,900.
"The conditions remain remorselessly tough. Look at MFI and Cable & Wireless cutting jobs, and we have higher taxes and utility bills."
Renewed concerns over how far US interest rate rises have to run also weighed on global equities after data showed the US economy grew faster in the fourth quarter than first reported.
"The markets are convincing themselves that US rates are going to 5 percent," Batstone added. "But I do not believe one can rely on rates going there, and that is a positive thing."
Leading the fallers, Alliance & Leicester slid 5 percent lower as investors took profits on a stock that had gained almost 40 percent in the four months to the publication of its annual results on Monday. Those figures showed a slim rise in profits.
Analysts said take-over speculation, which aided the stock's rise, had been overdone, and the shares look overvalued.
"The results meeting produced some new guidance on bad debt, costs and revenues," Fox-Pitt, Kelton analysts wrote in a research note. "This should spook those waiting around for the bid, removing a massive prop for the stock."
Mobile phone giant Vodafone fell 4.2 percent, taking more than 11 points off the index, after analysts cut estimates and target prices on the stock following the company's forecasts on Monday of slowing revenue growth and lower margins.
News and information provider Reuters slipped 4.5 percent after investment bank Credit Suisse cut its rating to "neutral".
The oil and gas sector took 23 points off the index after US crude oil prices slid towards $60 a barrel. BP fell 2.3 percent, and Royal Dutch Shell slipped 2.1 percent.
On the upside, shares in Europe's third-biggest bank, Royal Bank of Scotland, rose 2.7 percent after it said it would buy back shares worth up to 1 billion pounds in the coming year and raised its dividend sharply as it beat profit forecasts.
The world's second-biggest cigarette maker British American Tobacco gained 2.3 percent after it posted 2005 earnings near the top of analysts' forecasts.
Among mid-caps, wireless technology company CSR shed 13 percent after its results disappointed investors, despite notching up a near-doubling in pretax profit in 2005.
Aviation services firm BBA fell 10 percent, with sentiment damaged by a 6-percent fall in year profit.
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