The blue-chip FTSE 100 fell 0.9% on the day to post its third straight weekly decline, with healthcare, consumer goods and industrial stocks among the biggest drags in the index. The mid-cap FTSE 250 closed down 0.6%.
Brexit negotiations have been threatened by London's insistence that it has full autonomy over its state aid plans, negotiators and diplomats said, and fears are mounting that an exit without a trade deal could sow yet more economic chaos amid the COVID-19 crisis.
"There remains a fragile backdrop with mixed economic data, concerns about rising unemployment and no sign yet of a coronavirus vaccine, meaning that the slightest bit of bad news could be enough to cause further volatility in markets," said Russ Mould, investment director at AJ Bell.
UK stock markets have rallied since a coronavirus-driven crash in March, but had so far lagged their U.S. peers, which were scaling record highs on the back of historic stimulus and a jump in heavyweight tech stocks.
But U.S. benchmarks have fallen sharply since Thursday, with the tech-heavy Nasdaq shedding as much as 5% for a second straight day, sparking a flight from global equities. [.N]
"The selloff was both overdue, after the market has been unidirectional higher for months, and likely a blueprint of the kind of volatility we will see as we work our way into the fall," said Art Hogan, chief market strategist at National Securities.
In the UK, data showed the momentum behind a rebound in the construction industry faded unexpectedly in August, while new car registrations fell by 6% in annual terms - a "disappointing" turnaround after July's increase.
Housebuilders Barratt Developments, Persimmon Plc, Taylor Wimpey and Countryside Properties fell between 4.5% and 7% after the Competition and Markets Authority said it was investigating whether they might have broken a consumer protection law in relation to leasehold homes.
Those losses pulled the wider housebuilding index <.FTNMX3720> down 2.9% to its lowest in more than two months.
(Reporting by Shashank Nayar in Bengaluru; Additional reporting by Sagarika Jaisinghani; Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips)
By Shashank Nayar