But well-received results from drugs firm GlaxoSmithKline lent support to the UK market in a downbeat global environment flustered by US inflation concerns and news that General Motors had been subpoenaed in an investigation into its accounting practices.
The FTSE 100 index of blue-chip firms finished 45 points, or 0.9 percent, lower at 5,182.8 points - more than 300 points below a four-year high of 5,515 set at the start of the month.
"We think this is just a periodic correction in the indices triggered by some concerns over inflation, particularly in the US," said Cazenove strategist Tristan Hanson. "Equities look pretty cheap. We think now is quite an attractive time to be buying."
But some analysts sense a shift in sentiment, at least in the short term, as investors appear to react to bad news and ignore the good.
"It is difficult to see us getting back to 5,400 in the short term in the absence of some pretty strong results," said Hargreaves Lansdown head of UK equities Richard Hunter. "Corporate earnings on the other side of the pond are not looking that strong at the moment and that seems to be driving sentiment, rather than fundamentals. We are finding it difficult to get out of this range."
Shares in Reuters fell as much as 5.5 percent to trade at their lowest levels since last October after the news and information group posted third quarter revenue gains broadly in line with forecasts but disappointed investors looking for an upgrade to its second-half outlook.
The stock closed 4 percent lower at 351-3/4 pence, having touched 346p earlier in the session, making it the FTSE's biggest faller.
On a busy earnings reporting day among UK blue chips, pharmaceutical firm GlaxoSmithKline posted a forecast-beating 20 percent rise in quarterly earnings per share and said it was accelerating plans to provide bird flu vaccines in case of a pandemic.
Its shares closed 3 percent higher, contributing about 10 points to support the broadly weaker index.
Glaxo rival AstraZeneca reported a 49 percent jump in earnings per share but its sales missed the consensus forecast, pushing its shares 3.4 percent lower.
Medical devices firm Smith & Nephew rose 3.2 percent after it said it expected double-digit revenue growth in 2006.
With little more than one-10th of FTSE 100 firms finishing the day above Wednesday's close, the market was awash with falling stocks.
Despite bumper profits from the oil sector this week, including record results from Royal Dutch Shell on Thursday, natural resource stocks took more than 14 points off the index with miners such as Xstrata and Antofagasta falling about 2.5 percent each.
The sector has rallied on the back of soaring commodities prices but traders report investors taking profits from areas where they have seen the best gains, as global inflation fears grow and uncertainty emerges over the sustainability of high oil and metal prices.
Anglo-US fund manager Amvescap closed 2.9 percent lower after the firm reported a rise in third-quarter profit that analysts and dealers said had been flattered by proceeds from a large disposal.
Online gaming firm PartyGaming ended the session 3.6 percent weaker. The firm's shares have fallen sharply in recent months as concerns emerged over the prospects for growth in the sector.