FTSE 100 was 0.4 percent lower, falling for a second day, and the mid-cap index shed 0.3 percent as of 0928 GMT, joining a broad-based sell-off across global stocks.
Fears that a prolonged Sino-U.S trade dispute still had some run left emerged after the Financial Times reported that the Trump administration had rejected an offer from China for talks ahead of high-level negotiations scheduled for next week.
Further marring the mood were upsetting home sales data from the United States, a bigger-than-expected fall in Japan's exports in December and weak factory sales in Canada - all of which pointed to tough trading conditions across the world.
All the sectors on the FTSE 100 were in negative territory within ten minutes of the opening bell.
Luxury brand Burberry was down 2.1 percent following weak sales during the Christmas quarter. High-end retailers across Europe have also been hit as the protracted trade war between China and U.S. stoked fears over demand for these items from China.
Gold miner Fresnillo shed 1 percent after saying silver output would be slightly lower in 2019.
Bank shares <.FTNMX8350> were the worst hit, deepening their fall from the previous session when UBS posted disappointing results. Oil majors BP and Shell also fell despite higher crude prices.
Metro Bank tanked nearly 30 percent on the mid-cap index and was on course for its worst day on record as its annual profit missed estimates.
Sanne Group, which provides alternative asset and corporate administration services, tumbled over 12 percent after announcing the departure of its chief executive and a trading update.
But Europe's biggest plastics packaging maker RPC rose 4.7 percent, among rare gainers, after Apollo Global agreed to buy the company for 3.3 billion pounds, bringing an end to months of a bidding war.
Computacenter added 4.3 percent after an upbeat trading update boosted by higher IT spending in Germany and the United Kingdom.
(Reporting by Muvija M in Bengaluru; editing by Josephine Mason and Alexandra Hudson)