Global sentiment took a hit as a 32.9% plunge in U.S. second quarter economic growth, albeit lesser than expected, and a tweet from U.S. President Donald Trump about possibly delaying November elections unnerved markets.

"There's already heightened uncertainty around the election ... and the potential for a fiscal policy regime change. This just adds to that uncertainty," said Phil Orlando, chief equity market strategist, at Federated Hermes in New York.

The blue-chip FTSE 100 ended 2.3% lower on broad-based losses, with Lloyds Banking Group sliding 7.6% to an eight-year low after swinging to a rare pre-tax loss in the first half of 2020.

Standard Chartered tumbled 6.2% as the lender posted a 33% slump in first-half profit after a six-fold jump in credit impairment charges.

The mid-cap FTSE 250 slipped 1.3%, led by a 12% fall for car dealer Inchcape as impairment charges pushed it to losses.

The export-laden FTSE 100 is on track to record monthly declines in July after rallying since April as faltering economic data and surging COVID-19 cases have dented optimism over a swift post-pandemic economic recovery.

Oil majors <.FTNMX0530> BP and Royal Dutch Shell lost 3.6% and 5.5% as crude prices fell on fears that more COVID-19 containment measures could hurt demand. [O/R]

London shares of travel company TUI slipped after it said it will shut 166 stores in the UK and Ireland due to the downturn in travel caused by the coronavirus - a move that will lead to more losses in the battered sector.

AstraZeneca, meanwhile, rose 1.6% on an upbeat second quarter and reiteration of 2020 forecasts, while defence company BAE Systems jumped after announcing plans to restart dividend payouts.

(Additional reporting by Sinead Carew in New York; Editing by Uttaresh.V and Sherry Jacob-Phillips)

By Sagarika Jaisinghani and Susan Mathew