The FTSE 100 tipped into the red at the end of a turbulent session despite a rebound from strong US jobs figures.
UK oil, mining and banking stocks had a solid session, keeping the index afloat for most of the day before weaker sentiment elsewhere in Europe weighed on London traders.
London’s top flight closed 20.36 points, or 0.31%, lower at 6,630.52 on Friday.
David Madden, market analyst at CMC markets UK, said: “The major eurozone indices are showing losses but they are off the lows of the day thanks to the well-received US non-farm payrolls report.
“379,000 jobs were added last month and that hammered economists’ expectations of 182,000.
“It was a double victory because the January report was revised from 49,000 to 166,000. Overall it was a strong jobs report.”
As a result, the dollar strengthened as investors found reassurance in the greenback, with the value of the pound therefore losing ground after recent gains.
The pound decreased by 0.53% versus the US dollar to 1.382 and was down 0.02% against the euro at 1.160.
The Dow Jones and S&P 500 both opened higher after the stellar jobs report but then lost some steam amid speculation that the recovery could mean inflation pressure.
Across the continent, the major markets had harder tumbles than the FTSE as traders remained cautious over the rate of economic recovery. The German Dax decreased by 1% and the French Cac moved 0.82% lower.
In company news, the London Stock Exchange Group plunged in value after it said it expects higher operating costs in the new financial year.
The group told investors that pre-tax profit rose to £685m in 2020, up from £651m a year earlier, on revenue of £2.1 billion, up 3% for the period. It saw shares slide by 1,364p to 8,124p at the close of trading.
Frasers Group shares dropped after the Sports Direct owner said the Chancellor’s new business rates holiday is “near worthless” for larger firms and makes it close to impossible for it to take on old Debenhams shops.
Mike Ashley’s retail vehicle saw shares close 12.4p lower at 452.2p as it said that the £2m cap on the amount of relief a company can claim means it will have to review all its stores to find any that might no longer be viable.
BT jumped higher after both Credit Suisse and Barclays upped their target prices for the telecoms giant. Shares increased by 6.65p to 141.45p.
Boohoo fell into the red after it was reported that MPs have written to the group’s chairman in relation to the bonus scheme as well as workers’ rights. Shares fell 13.7p to 315.9p.
The price of oil soared to a 14-month high after Opec maintained its existing output levels despite chatter about a potential rise.
The price of Brent crude oil increased by 3.21% to $68.88 per barrel.
The biggest risers in the FTSE 100 were BT Group, up 6.65p to 141.45p, Standard Chartered, up 22p at 4.61p, Sainsbury’s, up 6.8p at 229.7p, and Pennon Group, up 27.6p at 955.6p.
The biggest fallers of the day were London Stock Exchange Group, down 1,364p at 8,124p, Scottish Mortgage Investment Trust, down 71p at 1,017p, IAG, down 12.3p at 203.9p, and Melrose, down 9.4p at 174.1p.
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