The London markets drifted into the red as continued concerns over the US-China relationship outweighed promising UK economic data.
The latest set of retail sales figures from the Office for National Statistics and flash PMI data for July both showed results above expectations but were viewed with some scepticism by analysts as the post-virus recovery continues.
The FTSE 100 closed 87.62 points lower at 6,123.82p at the end of trading on Friday.
Tensions have become increasingly strained between the US and China over the week, harming multinational stocks.
Earlier in the week, the FTSE 100 was above 6,300 and the Dax was north of 13,000, so dealers have been quick to trim their exposure to stocksDavid Madden, market analyst at CMC Markets
David Madden, market analyst at CMC Markets, said: “Mike Pompeo, the US secretary of state, called on the US’s allies to end the ‘blind engagement’ with China.
“The politician was critical of the Beijing administration and traders are running scared as they fear a further deterioration of the relationship between the two nations is on the cards.
“Earlier in the week, the FTSE 100 was above 6,300 and the Dax was north of 13,000, so dealers have been quick to trim their exposure to stocks.”
The major European markets also tumbled lower after a disappointing flash PMI for the eurozone held sentiment low, although global trade concerns remained the key driver for the decline.
The German Dax decreased by 1.97%, while the French Cac moved 1.57% lower.
Across the Atlantic, the Dow Jones nudged lower but managed to avoid the level of decline seen in Europe as trading cooled following heavy losses for the index on Thursday.
Meanwhile, sterling improved as it took advantage of the weak dollar. The pound rose 0.36% versus the US dollar at 1.278 and was up 0.05% against the euro at 1.099.
In company news, British Gas owner Centrica saw shares surge higher after it decided to end a 20-year stint in the US energy supply market by selling Direct Energy for 3.6 billion dollars (£2.9 billion).
Centrica also said that it reduced the impact of Covid-19 on its business by around £160 million after slashing bonuses.
Shares in the company moved 6.77p higher to 47.14p at the close of play.
Telecoms giant Vodafone slipped lower after it said it will list its European mast business early next year.
Vodafone announced plans last year to spin off the division, which has been renamed Vantage Towers, from its main operations to be floated in Frankfurt. Shares fell 6.64p to 122.16p.
Elsewhere, pharmaceutical firm Indivior soared in value after it agreed to pay 600 million US dollars and have a subsidiary plead guilty to a criminal charge over US allegations of engaging in an illegal scheme to boost prescriptions of an addiction treatment. Shares jumped 32.85p to 119.6p.
Shares in Cineworld dived 7.57p to 45.45p on Friday after cinema chains were hammered by Disney’s decision to postpone the release of three new movies indefinitely in the latest virus-driven blow to the sector.
The price of oil was broadly steady despite wide concerns across the global markets, nudging marginally lower.
The price of a barrel of Brent crude oil decreased by 0.53% to 43.02 US dollars.
The biggest risers on the FTSE 100 were Tesco, up 4.7p at 220.7p, Morrisons, up 3.35p at 188.1p, Ferguson, up 118p at 6,992p, and Johnson Matthey, up 32p at 2,290p.
The biggest fallers of the day were M&G, down 10.3p at 162.9p, Vodafone, down 6.64p at 122.16p, IAG, down 10p at 198.6p, and Ocado, down 96p at 2,083p.