“Seeing red” was the tone of this afternoon, as the FTSE 100 ended the day down 0.47 per cent at 7452.91 after sliding at lunchtime.
The euro hit its highest point in almost two years in morning trading against the US dollar, after European Central Bank (ECB) president Mario Draghi failed to convince investors of his dovish tone at a Frankfurt meeting.
This sent European markets into full retreat, and the pound took a dive.
US markets were also lower, as the atmosphere in Europe dampened the mood across the pond.
Medical products company ConvaTec was the most notable FTSE 100 performer of the day, as its share price climbed 1.98 per cent after yesterday's announcement that it would acquire Woodbury.
Clothing brand Next was also in the top five, after Investec upgraded it to “buy” earlier this month after saying it had been “actively managing its portfolio”.
At the other end of the scale, beleaguered security company G4S dropped by 3.17 per cent. Gambling company Paddy Power Betfair also lost out as its shares fell by 3.11 per cent, after Investec downgraded it to “sell” due to a worsening regulatory outlook.
"The FTSE 100 has been starved of heavyweight earnings this week, which perhaps accounts for its skittishness," said Chris Beauchamp, chief market analyst at IG.
"The prospect of a barrage of earnings over the next two weeks offers the chance of salvation."