"European markets tripped up again on Wednesday as volatile moves in the price of oil triggered wild swings in equities. The most consistent price moves were those based on fear as investors were drawn to havens like gold and the Japanese yen," said Jasper Lawler, analyst at CMC Markets.
"Dashed hopes of a Russian-OPEC joint oil production cut sent oil prices to the lowest in a week, though weekly US oil inventories data provided a little relief, enabling a bounce off the lows," he added.
Read more: Oils slide weighs on US markets
Standard Chartered extended its losses after it was downgraded by brokers after the bank posted a loss on Tuesday. Its share price fell 4.39 per cent to 389.1p.
"The continued weak revenue momentum in the fourth quarter of 2015 was worse than anticipated," analysts at Deutsche Bank said in a note. "Until revenue momentum turns, we think it too early to turn positive on the shares."
And "mining stocks ... [are] still suffering in light of BHP Billiton’s hacked dividend on Tuesday," Connor Campbell, analyst at Spreadex, said in a note.
BHP Billiton slid 8.38 per cent to 684.3p per share, while Anglo American was 9.57 per cent down at 409.75p per share. Glencore closed at 116.35p per share, a 10.12 per cent fall.
But other miners topped the FTSE, as investors were drawn to gold. Randgold Resources rose 1.99 per cent to 6,650p per share, while Fresnillo closed at 992.5p per share, a 1.69 per cent rise.
Housebuilders jumped after Barratt Developments reported a 40 per cent rise in half-year profits, and a strong start to 2016. Its share price jumped 1.69 per cent to 571.5p.
Persimmon was up by 2.27 per cent at 2,075p per share, and Taylor Wimpey rose less sharply by 0.62 per cent to 177.6p per share.