The FTSE 100 suffered a 1.3% drop in early trading as growth concerns in the US led to renewed global jitters.
London's leading index of shares has fallen more than 66 points, or 1.33%, to 4,898 after a disappointing US services sector report heightened fears of a lackluster recovery in the world's largest economy.
Consumer goods stocks are in sharp decline, with Burberry down 3.64%, M&S dropping 2.72% and Next dipping 2.12%.
BP has opened slightly ahead once again, as it emerged the company is going to inform the US government of all major business deals a month in advance. The oil giant is 1.66% higher to 351p.
Asian indices saw losses overnight, with Tokyo's Nikkei 225 down 0.63% to 9,279.65 and Hong Kong's Hang Seng falling 1.14% to 19,854.71.
In the US, after a 1.6% rise in early trading, the Dow Jones gave up most of the gains to close Tuesday 0.59% higher to 9,743.62.
Similar to the UK yesterday, resource stocks were among the top performers, with aluminum producer Alcoa climbing 2.1%. Microsoft led the gains, up 2.36%.
The broader S&P 500 finished Tuesday up 0.54% to 1,028.06 and the tech-heavy Nasdaq added 0.1% to 2,093.88.
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