Struggling department store Debenhams was a bright spot on the UK indexes after Sports Direct's Mike Ashley made a move towards running the more than 240-year-old company.
The main index and the FTSE 250 both closed 0.7 percent lower on the day, with the domestically-focussed midcaps suffering their worst week since early December.
GVC plunged 14 percent - its steepest drop in nearly nine years - to levels last seen in July 2016, after its chairman and chief executive sold some of their holdings in the company at a discount.
The fall in British stocks was in line with their global counterparts -- Shanghai equities fell their most in five months and Wall Street opened in the red after data showing U.S. job growth almost stalled in February.
Oil majors Shell and BP were the biggest drags on the main index after the Norwegian government said its trillion-dollar sovereign wealth fund, the world's largest, will drop oil and gas companies from its benchmark index and its investment universe.
Investors pooled their money into stocks that are deemed to be a safer bet at times of uncertainties, boosting shares in Unilever, Vodafone and utility National Grid.
Small-cap Debenhams jumped 15.6 percent on Ashley's plans to forego his current role as Sports Direct chief executive to focus on the ailing department store firm.
"Debenhams is in need of a lifeline, and there’s been widespread speculation it could be hauled aboard the good ship Sports Direct before too long," Hargreaves Lansdown analyst Laith Khalaf said.
"Not for the first time, Mike Ashley has surprised the market with a more unexpected solution to the problems besetting the retailer."
Earnings reports led some midcap stocks sharply higher despite the foul mood.
Building materials supplier SIG jumped 8.4 percent as 2018 profits surged on cost control. Thermal processing service provider Bodycote rose 7.2 percent on a profit beat.
However, tourism and insurance group Saga slipped 8.8 percent after JP Morgan downgraded it to "underweight" and said competitive markets were pressuring margins.
Goals Soccer Centre plummeted to a life low after the operator of outdoor soccer centres warned on profit and disclosed accounting errors. The stock ended down 32.1 percent after slumping about 50 percent.
"The recent rally in European markets appears to have finally run out of steam this week as investors start to take profits over concerns that the macroeconomic backdrop is much weaker than was thought to be the case," CMC Markets analyst Michael Hewson said.
(Reporting by Muvija M and Shashwat Awasthi in Bengaluru, Editing by Josephine Mason, Dale Hudson, William Maclean)
By Muvija M and Shashwat Awasthi