Britain's top share index eased on Thursday as disappointing earnings hurt construction materials companies and consumer giant Unilever, while investors sought sectors seen as safe amid growing economic uncertainty. US equities also came under pressure as hawkish Federal Reserve minutes fuelled concern over higher borrowing costs, adding to the broad downbeat sentiment.
The market shrugged off weaker British retail sales data which showed a slump in spending after a hot summer in which Britons splurged on barbecues and outdoor activities. The FTSE 100 gave up earlier gains to end the session down 0.3 percent, with CRH the biggest loser on the day as a profit warning from German cement maker Heidelbergcement weighed on basic materials stocks.
Ashtead Group was down 3.4 percent. Cyclical stocks like copper miner Antofagasta and Standard Life Aberdeen eased more than 3 percent.
Consumer giant Unilever fell 0.2 percent after its results, as analysts and investors focused on weaker-than-expected volume growth overshadowing better sales growth. "While these results are solid enough, they're not quite the stellar showing investors would have been looking for," said George Salmon, equity analyst at Hargreaves Lansdown.
UBS analysts said Unilever would need to deliver at least 3.1 percent sales growth in the fourth quarter in order to meet the lower end of its full-year guidance. "We think this is achievable, but it heightens the risk of a guidance miss if market conditions deteriorate," they wrote.
The biggest boost was the healthcare sector, with UK-listed drugmakers buoyed after Switzerland's Novartis raised its 2018 revenue forecast and announced a $2.1 billion acquisition of nuclear medicine specialist Endocyte. GlaxoSmithKline was up 1.1 percent and Shire climbed 1.3 percent. Education publisher Pearson was the biggest gainer on the FTSE for a second straight session, rising 3.8 percent and extending the previous day's rally.
Analysts from Morgan Stanley and Deutsche Bank were among those who increased their price targets following Pearson's well-received trading update on Wednesday. Shares in advertising agency WPP gained 0.4 percent after French rival Publicis' stronger trading update relieved some investor anxiety around the challenges facing traditional advertising firms.
Still, the overall market's swing into negative territory underscores the increasingly gloomy sentiment around third quarter earnings. Analysts are downgrading their estimates for the FTSE 100 as well as the mid-cap FTSE 250 index, which closed down 0.3 percent with some sharp results-driven moves.
Bus travel company National Express topped the FTSE 250 with a 6 percent rise after giving a positive outlook and reporting that strong British and Spanish trading boosted profit.
Peer Stagecoach Group also rose, by 3 percent. Domino's Pizza Group was the second-largest climber gaining 5.4 percent after it launched a 25 million pound ($33 million) share buyback.
"This is lower than the previous buyback of 50 million pounds, albeit it does at least mean that the group's leverage ratio will be less stretched than if a large buyback was announced," wrote Barclays analysts. Weighing on the overall market though, Games Workshop shares fell 5 percent after the manufacturer of Warhammer figurines warned of "uncertainties" for the rest of the financial year in a trading statement. "A very shortly worded update paints a dark picture for the future," said Russ Mould, investment director at AJ Bell.
"A lack of detail is surprising given Games Workshop has developed a reputation for being a very clear communicator in its results." Mediclinic International extended the previous session's losses with a 9.2 percent fall after its profit warning.
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