London-listed shares fell on Friday as a batch of mixed quarterly earnings updates and souring US-China relations dulled optimism about a post-pandemic economic recovery, with education firm Pearson sliding after posting a first-half loss.

Pearson tumbled 4.2% to the bottom of the FTSE 100 even as it said it had seen a rebound in demand since June.

The blue-chip FTSE 100 was down 1.7% and on course for its biggest weekly decline in six. Fewer than 10 stocks on the index were trading higher.

The mid-cap FTSE 250 shed 1%, despite a 22% jump for British Gas owner Centrica Plc after a deal to sell its North American business to NRG Energy for $3.63 billion.

Asian shares also skidded from six-month peaks as Beijing ordered the United States to close its consulate in Chengdu, in retaliation for being told to shut its consulate in Houston earlier this week.

"The big question remains: for how long can the bulls hold on to the driver's seat," said Charalambos Pissouros, market analyst at JFD Group.

"Further escalation in US-China tensions and a second round of lockdown measures may force more market participants to abandon equities and other risky assets."

The FTSE 100 has struggled in July to build on a three-month rally as hopes for a stimulus-led economic rebound were dented by surging global COVID-19 cases and relatively bleak corporate forecasts.

In the UK, retail sales jumped back almost to pre-coronavirus lockdown levels in June when non-essential stores in England reopened, but analysts warned that a greater shift toward online shopping might prevent a V-shaped recovery.

"Whether this translates into a sustained pick-up in sales will depend on how bad the rise in unemployment is over the coming months," analysts at ING wrote in a note.

Tech-related stocks were among the biggest drags on the FTSE 250, tracking declines on Wall Street.