London's markets tumbled as concerns over the worsening health crisis increased through the session, knocking the FTSE off course.
The index had opened steadily as it was buoyed by strong figures from HSBC but was hampered by rising Covid-19 cases in continental Europe and across the Atlantic.
The FTSE 100 closed 63.02 points lower at 5,728.99 at the end of trading on Tuesday.
David Madden, market analyst at CMC Markets UK, said: "European stock markets sold off again as worries about the health crisis have become more entrenched.
"Monday was a brutal session for equities as the jump in Covid-19 cases in Europe and the US, plus tougher restrictions, hammered traders' confidence in the markets.
"On Tuesday, things started out on a relatively quiet note, especially for the FTSE 100, but the coronavirus fears resurfaced."
Europe's other major markets continued their poor start to the week, with French traders particularly shaken by increasing case numbers.
The German Dax decreased by 0.93%, while the French Cac moved 1.77% lower.
Across the Atlantic, the Dow Jones nudged lower as stocks were fairly mixed, with traders digesting heavy falls from Monday trading and remaining cautious ahead of next week's presidential election.
Meanwhile, sterling improved on the back of weakness in the dollar, despite the UK CBI distributive sales report for October coming in with the weakest figures since June.
The pound rose by 0.34% versus the US dollar at 1.306 and was up 0.2% against the euro at 1.104.
In company news, HSBC was the top performer in the FTSE 100 after it said its losses will be at the lower end of the eight billion to 13 billion US dollars (£6 billion to £10 billion) that it had previously expected.
Meanwhile, profit before tax for the third quarter dropped by 36% to $3.1 billion (£2.4bn), but nevertheless ahead of the $2.1bn (£1.6bn) that had been forecast.
Shares in the bank moved 10.75p higher to 330.1p at the close of play.
Elsewhere, Bloomsbury Publishing saw its shares jump after it posted its strongest half-year profit since 2008 following a surge in e-book sales and a slew of bestsellers during the pandemic.
The Harry Potter publisher posted a pre-tax profit of £4 million for the six months to August, representing a 60% jump against the same period last year.
Shares closed 38p higher at 248p.
Plus500 saw shares slide despite the online trading firm reporting a 90% year-on-year increase in new customers.
It closed 132.5p lower at 1,488.5p after it said customer activity levels slowed in the final quarter of the financial year.
The price of oil improved as traders clawed back some of Monday's losses, after they had been hit hard by the fears surrounding the tougher restrictions and excess supply concerns from Libya. The price of a barrel of Brent crude oil increased by 0.15% to 41.18 US dollars.
The biggest risers on the FTSE 100 were HSBC, up 10.75p at 330.1p; Ocado, up 52p at 2,312p; Croda, up 134p at 6,378p; and DCC, up 104p at 5,124p.
The biggest fallers of the day were M&G, down 12.4p at 153.85p; Persimmon, down 137p at 2,378; Prudential, down 55p at 1,000.5p; and Legal & General, down 9.95p at 185.65p.
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