London's top-flight share index was hit by a bout of profit-taking as it fell sharply on the last day of a broadly positive quarter for stocks.
A slide in the oil price was also weighing on a number of companies amid the growing prospect of a US deal with Iran that will free up more of the commodity into the world market.
The FTSE 100 Index closed 118.4 points, or 1.7 per cent, lower at 6773, though it was still up more than three per cent on its level at the start of 2015.
However it is now nearly 300 points off a record intraday high set just a week ago, during a run that saw the index burst through the 7000 mark.
Shares have been buffeted in recent sessions by Chinese growth fears, with today's losses coming despite encouraging economic updates in Europe.
Germany's Dax and France's Cac 40 were also in the red. On Wall Street, the Dow Jones Industrial Average fell too following a strong previous session. In Europe, a survey showed economic confidence at its highest level since July 2011.
Official figures also raised hopes that deflation could be over much sooner than anticipated after consumer prices across the single currency zone fell by 0.1 per cent in the year to March, following a 0.3 per cent fall the previous month.
The updates failed to benefit the euro, which was down against the pound after it emerged that the UK economy grew by more than expected in 2014.
GDP rose by 2.8 per cent rather than the previous estimate of 2.6 per cent, while growth in the fourth quarter was 0.6 per cent, up from a previous estimate of 0.5 per cent.
Sterling soared by two cents against the euro to just over 1.38 while it was a cent ahead against the US dollar at a little less than 1.49.
In stocks, home improvement retailer Kingfisher was at the top of the blue-chip risers' board after announcing it will return £200 million to shareholders in the current year. the company announced an efficiency drive involving the closure of 60 stores in the UK and Ireland.
Profits were 7.5 per cent lower in the year to January 31 but shares still surged four per cent or 15.8p to 380.6p.
The prospect of a US-Iran deal helped the price of a barrel of Brent crude fall to around 55 US dollars, putting pressure on oil firms. Royal Dutch Shell fell 51p to 2099p while BP was 9.4p lower at 436.7p.
Outside the top flight, shares in outsourcing firm MITIE fell nearly six per cent after it said pressures on its homecare and social housing businesses meant full-year profits will be slightly below current market expectations. The stock fell 16.4p to 276p.
The biggest risers on the FTSE 100 Index were Kingfisher, up 15.8p to 380.6p, Babcock International up 21.5p to 984.5p, Persimmon up 16p to 1663p and easyJet up 15p to 1882p.
The biggest fallers on the FTSE 100 Index were Anglo American, down 48p to 1012p, Imperial Tobacco down 105p to 2963p, British American Tobacco down 106p to 3488.5p and BG down 23p to 829p.
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