LONDON: Britain's benchmark equity index fell on Wednesday, with construction and mining stocks among the worst-performers, as lacklustre Chinese data and a political crisis in Portugal hit equity markets.
The blue-chip FTSE 100 index was down by 1.7 percent, or 104.10 points, at 6,199.84 points in mid-session trading.
The FTSE raced to a 13-year high of 6,875.62 points in late May but those gains have been eroded over the last month, with the FTSE now up around 5 percent since the start of 2013.
Stock markets have been hit by expectations that the US Federal Reserve will scale back the economic stimulus measures that have driven the equity rally, and they suffered further blows on Wednesday from developments in China and Portugal.
Data showing a slowdown in construction activity in China, the world's biggest metals consumer, caused the FTSE 350 Construction Index to fall 3.2 percent, while the FTSE 350 Mining Index also fell 2.9 percent.
A political crisis in Portugal caused by disagreements over austerity measures also rekindled worries that Europe had not yet fully overcome the euro zone's sovereign debt crisis.
"Markets don't like to return to problems they thought had been solved. But the slow-motion disintegration of the Portuguese coalition and the alarming spike in bond yields shows that the medicine of austerity is still a very tough pill to swallow," said IG market analyst David Madden.
Securequity sales trader Jawaid Afsar saw little reason to add to positions on the FTSE 100 at present and said he favoured "defensive" stocks such as utilities and healthcare companies, seen as among the most resilient to any economic downturn.
"It's very hard to be bullish in this environment," he said.
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