Britain's top share index ended 0.8 per cent lower yesterday, echoing falls on Wall Street after disappointing US data weighed on sentiment with miners and banks, spearheads of the recent recovery, the heaviest fallers.
The FTSE 100 closed down 42.83 points at 5,455.37, but the index remains 57 per cent higher since its six-year trough in March 2009, and up 0.8 per cent so far in 2010.
In the US, the S&P 500 and Dow Jones were around one per cent lower as the British market closed, after a survey showed consumer sentiment stalled in early January.
"The figures stateside were certainly sobering for the markets given how far we have come and it has given those investors looking for a opportunity to sell a reason to do so," said Jimmy Yates, head of equities at CMC Markets.
Bank shares dipped as JPMorgan Chase & Co reported deep fourth-quarter losses on mortgage and credit card loans.
Barclays, HSBC, Standard Chartered and Lloyds Banking Group fell 0.9-2.3 per cent.
"I expect better figures later in the results season and hopefully that will support the FTSE around these levels," Mr Yates said.
Bank of America, Citigroup, Morgan Stanley and Goldman Sachs were due to report next week.
Miners dropped as metal prices slipped broadly on demand concerns. Antofagasta, Anglo American, Vedanta Resources, Lonmin and Kazakhmys shed 0.6-2.8 per cent.
Pharmaceuticals surrendered some gains posted in the previous session with heavyweight GlaxoSmithKline falling 2.6 per cent as Belgium cut its order for the company's swine flu vaccine Pandemrix by a third.
Peers AstraZeneca and Shire lost 0.7 per cent and 1.5 per cent respectively.
In individual issues, hedge fund company Man Group was the biggest blue-chip loser, down 6.9 per cent after its flagship AHL fund saw $1.2 billion in performance losses in the three months to December.
Heavyweight mobile phone network operator Vodafone was a significant drag on the index, down 1.6 per cent, with earnings estimates cuts by UBS one factor impacting it.
As the appetite for risk firmly took a back seat, defensive issues came to the fore with tobacco, supermarkets and energy suppliers all on the front foot.
British American Tobacco rose 1.2 per cent and Imperial Tobacco gained 2.1 per cent.
Supermarkets, which have enjoyed robust Christmas trading data of late, were also higher. Sainsbury and Tesco added 0.3 per cent and 0.8 per cent respectively, while Wm Morrison Supermarkets, yet to report, rose 1.1 per cent.
International Power was up 4.1 per cent, topping Britain's FTSE 100 gainers, with traders citing renewed speculation that French power generator GDF Suez was planning a takeover.