The London markets tumbled after the Government pushed back plans to reopen a raft of leisure venues.
Investors baulked after it was confirmed that casinos, bowling alleys and music venues have had reopening plans delayed due to concerns over the spread of the coronavirus.
Trading sentiment had already been fragile after it was announced that the economy of the 19-country eurozone shrank by a record 12.1 per cent during the second quarter.
The FTSE 100 closed 92.23 points lower at 5,897.76p at the end of trading on Friday.
Leisure firms dropped into the red after the Government put their reopening plans for this weekend on ice, with Hollywood Bowl and casino owner Rank Group both slumping.
Cineworld also dipped, falling by 1.42p to 38.2p, after it was announced that face coverings will be mandatory in cinemas and other indoor venues from August 8.
The FTSE was also pressed down by the continued strength in the value of sterling, which hit a new four-month high against the dollar.
David Madden, market analyst at CMC Markets UK, said: "The FTSE 100 was under-performing its continental counterparts on account of the firmer pound.
"Eurozone stocks were in the red also as there are worries about a second wave of Covid-19, and the lack of political progress with regards the proposed one trillion dollar stimulus package in the US was a factor too."
The pound rose 0.29% versus the US dollar at $1.313 and was up 0.48% against the euro at 1.110.
The other major European markets fared slightly better than London, but still closed in the red after the eurozone confirmed its greatest economic decline since records started in 1995.
The German Dax decreased by 0.54%, while the French Cac moved 1.43% lower.
Across the Atlantic, the Dow Jones slipped as weak sentiment across Europe dragged it into the red despite strong earnings performances by Apple and Amazon.
In company news, British Airways owner IAG plunged lower after it swung to a pre-tax loss of $4.2 billion euro (£3.8bn) in the first six months of the year.
The airline giant told investors it expects it will take until at least 2023 for passenger demand to recover to pre-coronavirus levels.
It saw shares slide by 16.3p to 164.75p at the close of play.
BT also dived in value after the telecoms firm took a big hit from the Covid-19 crisis as the money it made from its sports wing reduced.
Partly as a result of that, overall revenue dropped 7% to just over £5.2 billion in the first quarter. Shares closed 9.27p lower at 98.58p in response.
Elsewhere, Pets At Home surged in value after higher demand for pets during the lockdown helped to drive it to better-than-expected trading figures for the past quarter. It rose 55p to 311.4p.
The price of oil was broadly flat, nudging marginally lower following Thursday's sell-off. The price of a barrel of Brent crude oil decreased by 0.32% to $43.12.
The biggest risers on the FTSE 100 were Land Securities, up 17.8p at 576.6p, Avast, up 16p at 574.5p, 3i Group, up 21.2p at 889.6p, and British Land, up 8.6p at 366.1p.
The biggest fallers of the day were IAG, down 16.3p at 164.75p, BT, down 9.27p at 98.58p, Rolls-Royce, down 13.7p at 231.6p, and BAT, down 132p at 2,524.5p.
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