The FTSE 100 was 0.1 percent lower at 1019 GMT, off earlier lows as investors sought safety in stocks considered to be a better bet during times of economic uncertainty, including AstraZeneca, GlaxoSmithKline and National Grid .

The more domestically-exposed mid-cap index shed 0.5 percent. Both were dragged into a broad-based sell-off across global stocks.

Fears of a prolonged Sino-U.S trade dispute rose after the Financial Times reported the Trump administration had rejected an offer from China for talks ahead of high-level negotiations scheduled for next week. White House adviser Larry Ludlow denied the report, but the damage to sentiment was done.

Further marring the mood were soft US home sales data, a bigger-than-expected fall in Japan's exports in December and weak factory sales in Canada - pointing to tough trading conditions across the world.

Luxury brand Burberry fell on weak Christmas sales data, but recovered almost all of its losses. High-end retailers across Europe have been hit by concerns a prolonged Sino-US trade war could hit Chinese demand.

"The rejuvenation of the iconic Burberry brand is still in its early stages, but there are clear signs that the new management team is taking the bull by the horns," said Richard Hunter, head of markets at Interactive Investor.

Uncertainties over Britain's exit from the European Union persisted. As the March 29 deadline approaches, hopes are growing British lawmakers will prevent a disorderly no-deal departure, although no sign of an agreement has yet emerged.

Bank shares deepened their fall from the previous session when UBS results missed expectations.

Oil majors BP and Shell fell as crude prices flirted with negative territory in choppy trading.

Metro Bank tanked nearly 30 percent on the mid-cap index - losing more than 700 million pounds in market value - and was on course for its worst day on record as its annual profit missed estimates.

Sanne Group, which provides alternative asset and corporate administration services, tumbled 16 percent after announcing the departure of its chief executive and a trading update.

But Europe's biggest plastics packaging maker RPC rose 4.7 percent, among rare gainers, after Apollo Global agreed to buy the company for 3.3 billion pounds ($4.3 billion).

Computacenter jumped 7.1 percent after an upbeat trading update boosted by higher IT spending in Germany and the United Kingdom.