The FTSE 100 lost 0.7 percent and the FTSE 250  down 0.5 percent by 0730 GMT.

Taylor Wimpey shed 6.6 percent after it warned full-year margins would be slightly lower than last year as it cost more to build homes.

Fellow blue-chip housebuilders slipped after the update from Britain's third-largest homebuilder. Persimmon fell 4 percent, Barratt gave up 3.3 percent and Berkeley  lost 2.3 percent.

Sainsbury's tumbled 6 percent to a near three-year low after the supermarket chain scrapped its proposed 7.3 billion pound takeover of Walmart-owned Asda after the deal was blocked by Britain's competition regulator.

Shares of rivals Tesco, Morrisons and Ocado  were down between 1.6 percent and 2.1 percent.

Barclays' first-quarter profits fell 10 percent as tough market conditions led to lower earnings at its under-pressure investment bank, sending shares down 1.3 percent.

Stocks trading ex-dividend also dragged the main bourse lower. Legal and General gave up 4.9 percent, miner Antofagasta shed 3.3 percent and Glencore fell 2.5 percent.

Housebuilders on the mid-cap index were also left reeling after Taylor Wimpey's statement. Bovis Homes skidded 5.4 percent while Redrow, Bellway and Crest Nicholson all fell at least 4 percent.

Tullow Oil sank 5 percent after lowering 2019 output guidance due to problems at its Ghana fields.

Among small stocks, flooring retailer Carpetright surged 47 percent on track for its best day in almost 26 years as it saw significant improvement in UK like-for-like sales in its latest quarter, indicating that restructuring efforts were beginning to pay off.