The major markets paused for thought on a subdued trading session amid increasing caution over the spread of coronavirus.
A trading session devoid of much major economic news meant investors remained on tenterhooks over the impact of coronavirus, with more reports that the virus is spreading further out of China unsettling some investors.
The FTSE 100 flight closed 20.38 points lower at 7,436.64 at the end of trading on Thursday.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets took a bit of a pause as investors mulled over whether there is scope to drive stocks much higher against a backdrop of a coronavirus, which appears to be starting to spread beyond China to Japan and South Korea.
“This caution is entirely understandable, given that recent gains in global stock markets have been predicated on the basis that any ripple-out effects from the coronavirus are likely to be transitory in nature, and yet the main headlines appear to show that it is spreading out beyond China.”
The other major European markets also closed in the red as they failed to keep up the momentum from a strong trading session on Wednesday.
The German Dax decreased by 0.87% while the French Cac moved 0.8% lower.
Across the Atlantic, the Dow Jones slipped back from record highs as investors were subdued during a quiet opening.
Meanwhile, sterling sank despite the latest retail sales figures coming in ahead of expectations, after equally positive economic data in the previous two trading days.
The value of the pound fell 0.36% versus the US dollar at 1.287 and slid 0.26% against the euro at 1.192.
In company news, Lloyds moved marginally higher despite the bank warning of a hit to 2020 results amid tough competition in the mortgage market.
The lending giant lowered two key targets for 2020 as its retail margins come under pressure amid low interest rates and intense price competition that is affecting players across the sector.
Shares in the company closed 0.77p higher at 56.55p at the end of trading.
Medical equipment firm Smith & Nephew was one of the FTSE 100’s top risers after it saw annual sales surpass five billion US dollars (£3.8 billion) for the first time.
The group reported a 4.4% rise in underlying revenues to 5.1 billion US dollars (£4 billion) for 2019 and predicted growth of 3.5% to 4.5% for 2020 but cautioned that coronavirus could cloud its outlook. Shares rose 134p to 1,979p.
BAE Systems was another riser, with its shares increasing after it hailed a “year of significant progress” and delivered strong financials alongside a new deal for its pensioners. Shares in BAE rose 16.4p to 656.4p.
The price of oil nudged marginally higher as recent price rises appeared to stall amid more caution over China.
The price of a barrel of Brent crude oil increased 0.05% to 59.32 US dollars.
The biggest risers on the FTSE 100 were NMC Health, up 74.4p at 857.4p, Smith & Nephew, up 134p at 1,979p, Centrica, up 3.08p at 78p, and DS Smith, up 11.8p at 362.7p.
The biggest fallers on the index were Imperial Brands, down 135p at 1,709p, Aveva, down 298p at 4,992p, Burberry, down 93p at 1,920p, and Meggitt, down 25.2p at 612p.