The London market suffered its biggest one day fall in a month after official figures showed a sharp slowdown in UK economic growth at the start of the year.
The figures, which come nine days before the general election, mean that after experiencing the strongest growth among the G7 leading advanced economies last year, the UK may begin 2015 at a more sluggish pace even than the beleaguered eurozone.
The FTSE 100 Index fell 73.5 points to 7030.5 after the Office for National Statistics (ONS) said gross domestic product (GDP) increased by just 0.3% in the first three months of 2015.
It was half the rate of growth of 0.6% seen in the fourth quarter and worse than the expected figure of 0.5%.
The data showed the construction sector shrank sharply in the first quarter while industrial production also contracted and the dominant services sector saw the slowest pace of growth for nearly two years.
London's top-flight had surged to a record intra-day high of 7122.7 on Monday and also posted its best ever close, driven by hopes of an end to the deadlock in indebted Greece's bail-out talks with creditors.
But it began the latest session on the back foot amid jitters over this week's Federal Reserve meeting, when US policy makers are expected to offer guidance on when interest rates will start to rise from their rock-bottom level.
Sterling was initially down against the US dollar following the figures, which appear to cement expectations that interest rates will not rise until next year.
But the pound, which has been recovering from a recent near five-year low against the greenback, was later a cent higher at just under 1.53. It was little changed against the euro at a little below 1.40.
In equities, BP was among the handful of risers after it reported first quarter results showing underlying profits of 2.6 billion US dollars (£1.7 billion).
It was a 20% fall on a year ago, attributed to sharply lower oil and gas prices, but the figure was not as bad as the City feared, leaving the stock just 0.8p lower at 476.1p.
British Gas owner Centrica, which also has a major "upstream" production and exploration business, was a strong performer on the top-flight risers' board lifting more than 2%, or 6.2p at 275.3p.
Among other corporate results, Whitbread said underlying profits rose by 18% to £488.1 million in the financial year to February 26.
The group also set out its plans for the next five years, with a target of 900 Premier Inn hotels and Costa sales of £2.5 billion by 2020.
But shares fell as Whitbread announced that chief executive Andy Harrison will retire by February next year, while Numis cut its profit forecast for the business. The stock slid more than 2%, or 140p, to 5300p.
The biggest risers on the FTSE 100 Index were Anglo American up 25.5p at 1129p, Centrica up 6.2p at 275.3p, Fresnillo up 15.5p at 743p and Marks & Spencer up 7.5p at 555p.
The biggest fallers on the FTSE 100 Index were St. James's Place down 31p at 875.5p, AstraZeneca down 157.5p at 4548p, Carnival down 102p at 3056p and Standard Chartered down 35.5p at 1080p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article