UK stocks ended down on Friday, suffering their biggest weekly fall since October, as oil stocks such as BP fell and reassuring US data failed to offset concern triggered by China's interest rate hike.
Bid activity and speculation influenced a range of stocks, with directories firm Yell falling after it moved to buy a Spanish peer, while banks such as Standard Chartered and Alliance & Leicester rose on talk of possible approaches.
The FTSE 100 closed 36.9 points, or 0.6 percent, weaker at 6,023.1 points - taking the week's losses to 109.6 points, or 1.8 percent.
That is the biggest one-week fall since late October and comes a week after the index scored its biggest weekly gain since January.
European indexes had recovered from early losses to trade flat on Friday when US data showed solid economic growth with softer inflation, but stocks slipped back into the red as Chinese-inspired worries persisted and investors took profits.
"The market has had an extremely good run since October and it was due a pause and a bit of profit-taking," said Roger Cursley, a strategist at Investec. "I would not be surprised if we get a little bit more."
Oil and mining stocks came under pressure as some investors feared higher borrowing costs in China would damage the earnings of natural resources companies - like Xstrata - which have reaped the rewards of surging global demand for commodities.
Oil majors Royal Dutch Shell fell 1.8 percent and BP one percent as oil traded around $72 a barrel but held onto a gap from recent record highs above $75.
Concerns over Iran's nuclear programme supported oil and kept equity investors cautious before of the May Day holiday weekend, which will be observed in much of Europe with most stock markets closed on Monday.
"If markets are generally a bit nervous, that (Iran) can only add to the nervousness. I can't imagine a lot of good news is going to come out of it given what we know about Iran's intentions," said Axa Investment Managers strategist Chris Iggo.
Telephone directory company Yell fell 2.9 percent after it agreed to buy Telefonica's 59.9 percent stake in TPI and offered to buy the whole of the Spanish directories firm for $3.8 billion.
But revived bid speculation offered some support to the index, with Standard Chartered leading FTSE gainers, up 2.9 percent on market talk that Singapore investment agency Temasek is buying more stock in the Asia-focused bank.
InterContinental Hotels Group ended flat, having earlier hit a record 990 pence a share on talk private-equity interests might be prepared to pay up to 1,250p a share for the firm.
"There have been so many bid rumours, and lots of them haven't materialised, so people are sitting on their hands," said a trader explaining IHG's move back from its highs.
Mid-cap software firm iSoft fell 16.5 percent after it said it expected to post current year earnings below market expectations.
The mid-cap FTSE 250 breached the psychological 10,000-point barrier this week, but slipped back to close down 0.5 percent at 9,878.7 points on Friday.
"The logic (behind the FTSE 250 rise) has been that growth prospects are improving in the UK. We think the evidence is still far from clear," said Investec's Cursley.
Back among FTSE 100 gainers, GlaxoSmithKline, rose 1.6 percent after brokers upgraded recommendations following the drug giant's forecast-beating results and upbeat statement on Thursday.