THE FTSE 100 followed US equities into the red on Thursday as excitement over Donald Trump's expected tax cuts started to wane.
London's top tier index nudged back below the 7,300 mark, backing away from one month highs to end the day down 0.3 per cent or 24.49 points at 7,277.92 points.
It came as major US indices including the Dow, S&P 500 and NASDAQ Composite dipped into the red following a multi-day record-breaking streak, with analysts suggesting that enthusiasm for Mr Trump's fiscal policies was fading.
"At some points investors need to ask themselves how much the 'Trump Trade' is actually worth," Michael Hewson, chief market analyst at CMC Markets UK, said.
"The US President has promised financial markets something phenomenal in the next couple of weeks; however the big question is will he be able to deliver what the market is pricing in? This may help explain why markets in Europe are starting to slide back."
London's blue-chip index was also bearing the brunt of hefty falls after AstraZeneca, BP and Royal Dutch Shell turned ex-dividend, meaning new shareholders are no longer entitled to the latest payout.
AstraZeneca fell 159.5p to 4,524.5p, Royal Dutch Shell's 'B' dropped 49p to 2,225.5p, while BP fell 9.15p to 448.4p.
The index received minimal support from the pound, which rose 0.1 per cent against the US dollar to 1.246 and fell 0.5 per cent against the euro to 1.169.
The FTSE 100's multinational firms tend to benefit when foreign currencies are stronger than the pound, with the potential to boost earnings.
Across Europe, the French Cac 40 and German Dax dropped 0.5 per cent and 0.3 per cent, respectively.
In oil markets, Brent crude prices fell 0.7 per cent to $55.27 per barrel (£44.21), as some technical investment positions started to unwind.
In UK stocks, Shire shares rose 174p to 4,763p after reporting a rise in sales on the back of its Baxalta acquisition.
Cobham shares fell 20.7p to 114.7p after the struggling aerospace and defence firm issued another profit warning, revealing that it would book a mammoth £574 million writedown and take a £150m hit from a US military contract.
Drax shares plunged 20p to 359p after the energy group revealed that underlying pre-tax profit more than halved to £21m last year, pinning the fall on challenging commodity markets and the government's removal of Climate Change Levy exemptions.
The biggest risers on the FTSE 100 were Coca-Cola HBC up 89p at 1,912p, Shire up 174p to 4,763p, Smurfit Kappa Group up 44p at 2,203p, and Capita Group up 8.5p at 516p.
The biggest fallers on the FTSE 100 were AstraZeneca down 159.5p to 4,524.5p, Royal Dutch Shell's 'A' shares down 47.5p to 2,123p, Royal Dutch Shell's 'B' shares down 49p at 2,225.5p, and Antofagasta down 17.5p at 848.5p.
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