BLUE-CHIP London stocks were feeling the knock-on effects of a gloomy mood in the US on Wednesday, with the Wall street hangover sending European markets into the red.

The FTSE 100 index closed 100.92 points lower, a decline of 1.44%, at 6,921.84.

Meanwhile, the French Cac was down 1.36% and the German Dax finished 1.19% lower.

Although the main indices in the US were closed on Wednesday to honour former president George HW Bush, whose funeral took place in Washington, the impact of Tuesday's major losses was still being felt in other global markets.

Fiona Cincotta, senior market analyst at City Index, said: "Concerns over global trade are back on the agenda as the fine print on the recent US China deal became apparent, that is that the deal is only valid for the next three months.

"US markets are mostly closed for George Bush Senior's day of mourning - although there is still some electronic trade taking place in futures, options and in commodities."

Meanwhile, the pound struggled for direction over the lack of clarity on how Britain's departure from the European Union will go.

The currency rose on Wednesday following the publication of legal advice Theresa May received on Brexit. It marked a recovery from a fall the previous day when a series of defeats for the Prime Minister meant the Government became the first in history to be found in contempt of Parliament.

The pound was up 0.22% to $1.275 and up against the euro, rising 0.16% to 1.122.

David Madden, market analyst at CMC Markets, said that it is looking less and less likely that the UK will leave the EU without a deal, which is helping the pound.

"Traders care couldn't less about political embarrassment for the Government, and if the risks of a no-deal Brexit are reduced, that is likely to keep sterling elevated," he said.

Oil prices were higher as traders looked forward to a possible output cut by major oil producing companies, which are due to meet on Thursday.

A barrel of Brent crude was trading 1.68% higher at $62.31.

On the London market, Shire was 140.5p higher at 4,690.5p after Japanese firm Takeda won shareholder approval for its £46 billion acquisition of the company.

Ted Baker shares recovered slightly after two days of declines as the company deals with allegations of harassment levelled at its founder Ray Kelvin.

Shares were 47p, or 3.31%, higher at 1,467p.

Fellow British brand Joules was turning its attention to Brexit by setting up an EU distribution hub and ordering products early as part of contingency plans for a potential hard Brexit.

It came as the company unveiled a 21.2% rise in retail sales to £79.9 million in the first half.

The share price jumped 23p, or 11.11%, to 230p.

The biggest risers on the FTSE 100 were Persimmon up 131.5p to 1,995.5p, Berkeley Group up 193p to 3,423p, Barratt Developments up 23p to 473.8p and Taylor Wimpey up 5.55p to 137p.

The biggest fallers on the FTSE 100 were Ashtead Group down 103.5p to 1,672.5p, Melrose Industries down 8.85p to 166.35p, NMC Health down 170p to 3,196p and Hargreaves Lansdown down 88p to 1,891p.