The FTSE 100 drifted lower as the Chancellor's summer statement failed to excite traders.
Positive sentiment in the US also failed to drag the European indices higher as it weighed down by early caution in the Asian markets.
London's top flight closed 33.74 points lower at 6,156.16p at the end of trading on Wednesday.
Connor Campbell, financial analyst at Spreadex, said: "Rishi Sunak's summer statement didn't end up doing much for the FTSE, nor did a positive open for the Dow Jones.
"The mini-budget wasn't robust enough to distract European investors from the continued acceleration of global Covid-19 cases, the return to lockdown in Melbourne, and what this will all mean for the pace of any economic recovery."
The major European markets slipped as they remained consistently cautious, after a similarly negative session on Tuesday.
The German Dax decreased by 0.97%, while the French Cac moved 1.24% lower.
Across the Atlantic, the Dow Jones climbed after the bell despite coronavirus concerns remaining high across the country.
Meanwhile, sterling flitted around during the Chancellor's statement but ended broadly flat as there was little to show a major shift in fiscal policy.
The value of the pound rose 0.37% versus the US dollar at 1.259 and was down 0.15% against the euro at 1.111.
Housebuilders and estate agents were buoyed by plans to temporarily remove stamp duty for houses below £500,000, with the likes of Savills and Persimmon all moving higher.
Restaurants and hospitality firms also saw shares float higher, with Wagamama-owner The Restaurant Group rising after the Government cut VAT on meals and announced a 50% discount for people dining between Mondays and Wednesdays in August.
David Madden, market analyst at CMC Markets UK, said: "The assistance to the hospitality sector doesn't include alcohol, which could explain why pub groups like JD Wetherspoon are in the red."
In company news, transport firm FirstGroup tumbled after it flagged doubts over its future amid the pandemic as passenger numbers plunged and it slumped to a £300 million loss.
The bus and rail firm - which runs train franchises including South Western Railway and Avanti West Coast - revealed a "material uncertainty" over its ability to continue as a going concern. Shares closed 11.34p lower at 37.84p as a result.
Shares in Boohoo also slid lower for the third successive day, despite it appointing a top lawyer to look into allegations that factories involved in the making of its clothes were paying below minimum wage and breaching safety rules.
It closed 36.9p down at 224.5p as its board said it was "shocked and appalled" by the allegations, which were aired in the Sunday Times last weekend.
Elsewhere, Metro Bank moved higher after it named industry veteran industry veteran Robert Sharpe to replace controversial co-founder Vernon Hill. Shares rose by 1.75p to 113p.
The price of oil nudged higher as the energy market remained broadly muted. The price of a barrel of Brent crude oil increased by 0.37% to 43.02 US dollars.
The biggest risers on the FTSE 100 were Rolls-Royce, up 10.3p at 287.8p, Fresnillo, up 23.4p at 908.6p, ABF, up 45.5p at 1,996.5p, and BHP, up 32.8p at 1,682.2p.
The biggest fallers of the day were WPP, down 33.4p at 591.4p, Melrose, down 4.85p at 114.1p, IAG, down 8.5p at 212.1p, and Ashtead, down 97p at 2,664p.
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 here