The FTSE 100 took a step back on Thursday amid a sell-off after striking a nine-month high in the previous trading session.
The index was steady for large parts of the session but tipped downwards in the afternoon after disappointing inflation data in the US dampened hopes for interest rate cuts.
US producer price index (PPI) inflation was hotter than expected at 1.6% for the month, stoking expectations interest rates will remain high at the next Federal Reserve meeting.
It caused markets across Europe to lose momentum, although those on the continent were broadly more robust.
Housebuilders were nevertheless among the stronger performers in London after strong revenues and profits from developer Vistry helped to drive optimism in the sector.
London’s top index closed 29.02 points, or 0.37%, lower to end the day at 7,743.15 as a result.
The German Dax index was down 0.11% at the close and the Cac 40 in France closed up 0.29%.
Meanwhile, sterling waned as the dollar was supported by the higher-than-predicted inflation figure.
Fawad Razaqzada, market analyst at City Index, said: “After ignoring CPI (consumer price index) data earlier in the week, the US dollar found the latest inflation data too hot to ignore this time.
“The greenback rallied across the board, causing gold to fall as PPI inflation came in higher than expected, while the breakout in crude oil prices further exacerbated concerns over inflation remaining high for longer.”
The pound was down 0.39% at 1.274 US dollars and was 0.2% higher at 1.170 euros at market close in London.
In company news, Trainline shares lifted after it revealed a first class update for investors, with ticket sales surging by 22% over the past year to February.
The online ticketing platform said higher UK revenues were partly boosted by supported by “fewer strikes than in the prior year, which were also less severe in their impact”.
As a result, the company saw shares rise by 42.6p to 369.8p at the end of trading.
Elsewhere, Deliveroo also finished higher after takeaway delivery specialist revealed it trimmed its losses over 2023, as it said people paid more money for fewer orders amid a “fragile” consumer spending environment.
The group posted a £31.8 million loss for the year, significantly smaller than the £294.1 million loss reported for 2022.
The finished the day up 2.7p at 117.2p.
Irn Bru maker was another riser as shareholders welcomed an overhaul at the drinks maker, which is set to hit up to 195 jobs.
Shares were up 12p at 539p after it revealed plans to close direct sales operations at three sites across the UK and shut the Leeds office for its energy drink brand, Boost.
The price of oil rose firmly after the IEA increased its demand outlook due to a positive outlook in the US.
A barrel of Brent crude oil was up by 1.64% to 84.81 US dollars as markets were closing in London.
The biggest risers on the FTSE 100 were Informa, up 19.8p to 825.4p, Smurfit Kappa, up 58p to 3,492p, Weir Group, up 32.5p to 1,986p, ConvaTec, up 4.6p to 287.6p, and Berkeley Group, up 72p to 4,677p.
The biggest fallers on the FTSE 100 were Anglo American, down 103.4p to 1,833.6p, NatWest Group, down 12.8p to 240p, Segro, down 32.6p to 850.8p, IAG, down 5p to 148.95p, and Whitbread, down 80p to 3,216p.