GlaxoSmithKline was the biggest drag on the FTSE which fell in early trading as oil companies also dropped.
The FTSE 100 Index was down 0.7% to 6561.30 while the FTSE All-Share Index also fell 0.7% to 3408.98.
The 2.5% fall for Glaxo was attributable to Merrill Lynch lowering its recommendation on the shares from neutral to sell. Meanwhile, BP and Royal Dutch Shell dropped 0.6pc and 0.9% respectively.
Another notable fall was Standard Life Plc which lost 2.75 pence, or 0.8 percent, to 337.25. Its shares were rated `underweight by JPMorgan Chase & Co. as the bank believes Standard Life is currently overvalued based on the prospects for the SIPP market, which it feels are likely to dwindle.
However, supermarkets were stronger with Wm Morrison, J Sainsbury and Tesco the top performers.
In Japan shares fell following a plunge by Chinese stocks amid fears a tripling of the tax on mainland securities transactions will spread to equities throughout Asia.
China's benchmark CSI 300 Index dropped as much as 7.6%; the last time the index fell by such a high figure in February it sparked a five-day global sell-off.
The Nikkei 225 Stock Average was down 0.5% to 17,588.26 at the close of trading in Tokyo while the Topix slid 0.2% to 1733.75.
Chugai Pharmaceutical Co. fell the most since January 2003 after reporting the price of its cancer drug will be around 40% less in Japan than the U.S. Toyota Motor Corp. also dropped for the first time in three days.
Despite gloom for Asia, Wall Street closed on a positive note buoyed by better-than-expected consumer confidence data and new takeover talks.
The Dow Jones industrial average rose 14 to 13,521, while the S&P 500 index was up 2 to 1,518 and the Nasdaq increased 14 to 2,572.
The indices were supported by consumer confidence levels reached 108 in May, more than the 105 expected and higher than last month’s reading of 104.
A number of takeover deals were also announced including the purchase of property firm Archstone-Smith Trust for $22bn by real estate group Tishman Speyer Properties and investment bank Lehman Brothers.
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