The FTSE 100 led European stock markets lower as international trading was subdued by comments from US president Donald Trump on the state of negotiations with China.
Mr Trump had threatened he could impose further tariffs on China if it does not conclude trade talks with a deal soon.
“If we don’t make a deal with China, I’ll just raise the tariffs even higher,” he said on Tuesday.
The comments weighed on the FTSE 100 on Wednesday, helping send it down 0.84% to 7,262.49.
The US government are keen to see a return to normality to (Hong Kong)David Madden, CMC Markets
It was at the forefront of a retreat of some of Europe’s biggest indices, with the Germany’s Dax down 0.48%, and the Cac index of Paris-listed shares falling 0.25%.
“To add to the mix, the US Senate passed a bill backing the human rights of the people in Hong Kong, and that has annoyed the Chinese government. The unrest in the financial hub has been widely reported, and it appears the US government are keen to see a return to normality to the region,” said David Madden, an analyst at CMC Markets.
In company news, Fever-Tree has warned that full-year sales are set to miss annual forecasts after a weak performance in the UK.
The tonic maker said its UK sales for the off-trade – supermarket and off-licence sales – were below expectations in the second half of the year on the back of “weak consumer spending”.
Insurance giant Aviva has revealed a structural shake-up and plans to sell off its Hong Kong business.
As part of an overhaul being led by new chief executive Maurice Tulloch, Aviva has been divided across five operating divisions – investments, savings and retirement; UK life; general insurance; Europe life; and Asia life.
B&Q owner Kingfisher has seen shares come under pressure after its new boss revealed “disappointing” recent trading with another slide in sales at the DIY group.
Shares slumped as much as 9% at one stage as chief executive Thierry Garnier admitted there is “much to do” to turn around the firm’s fortunes.
United Utilities has warned that the prospect of being nationalised is a “key area of uncertainty” as the company prepares for the General Election next month.
The company listed the policy, which has been put forward by the Labour Party, alongside Brexit, as one of the potential risks to its business.
Oil prices jumped over the day, with international standard Brent crude gaining 2.5% to 62.46 dollars.
The biggest risers on the FTSE 100 were Scottish Mortgage, up 8.5p to 519.00p, AB Foods, up 22p to 2,458.00p, Rightmove, up 5.4p to 611.80p, Evraz, up 3.2p to 363.70p, and Auto Trader, up 2.8p to 539.00p.
The biggest fallers on the FTSE 100 were Kingfisher, down 14.8p to 194.00p, Pearson, down 25.2p to 642.00p, NMC Healthcare, down 97p to 2,497.00p, Aviva, down 14.8p to 403.50p, and Sage Group, down 22p to 720.00p.