The slide came after it was reported that China's finance ministry had told local governments to quicken the pace of spending on construction projects in order to boost the slowing economy.
The FTSE 100 Index stood 26.8 points lower at 6844.5 as jitters also surfaced over the extent of next week's expected stimulus measures from the European Central Bank.
Policymakers are thought likely to cut the ECB's benchmark interest rate from 0.25 per cent to stimulate lenders that deposit with it into providing finance to businesses and consumers.
The economic uncertainty impacted on miners, with Anglo American down by more than 5 per cent or 87.5p to 1457.5p and Rio Tinto off 131.5p at 3057p.
The pound strengthened against the US dollar and euro - at 1.67 and 1.23 respectively - after a raft of surveys pointed to further strong growth in the UK economy.
The CBI said output was surging ahead at its strongest rate since at least 2003, while the British Chambers of Commerce upgraded its growth forecast for this year from 2.8 per cent to 3.1 per cent.
On the FTSE 100 risers board, medical equipment firm Smith & Nephew continued to improve despite an earlier denial from US rival Stryker about a potential takeover swoop.
Shares rose nearly 4 per cent on Thursday and were up by another 2 per cent or 17p to 1046p, giving the UK firm a market value of around £9.4 billion.
Pub company Mitchells & Butlers was 1.5 per cent higher in the FTSE 250 Index amid speculation that it is set to consider the resumption of dividend payments.
The Times newspaper said the potential pay-out would not be jeopardised by the company's planned £250 million acquisition of the Orchid pub company.
Shares were 6.1p higher at 420.8p in a session when other leisure-based firms also did well. Premier Inn owner Whitbread improved 48p to 4186p, while betting shop firm Ladbrokes was up 2.2p to 152.6p.
Conveyor belt manufacturer Fenner was the biggest faller in the FTSE 250 Index after a profits warning on the back of weak trading conditions in US coal.
Shares dived 10 per cent or 39.7p to 350p as it said it expects profits will be reduced by 10-15 per cent relative to the current market forecast of £77.6 million.
The biggest FTSE 100 risers were Admiral up 30p at 1458p, Smith & Nephew ahead 17p at 1046p, Sainsbury's up 5.5p at 346.1p and Marks & Spencer ahead 6.4p at 449.2p.
The biggest fallers were Anglo American down 87.5p at 1457.5p, Rio Tinto off 131.5p at 3057p, BHP Billiton down 72.5p at 1868p and Fresnillo off 29p at 806p.