The FTSE 100 started the New Year in negative territory amid weakness in oil and consumer stocks. It closed 0.5% lower at 7,648.
Nurofen seller Reckitt Benckiser (RB.) was flat at £69.36 on media reports that its biggest shareholder JAB Holdings was planning to cut its stake in the business. Its rival Unilever (ULVR) was marked 1.4% lower to £40.67.
Oil colossus BP (BP.) reported it would have a one-off $1.5bn charge in its fourth quarter results following a reduction in the US corporate income tax. Its shares fell 0.3% to 520.9p.
Shares in peer Royal Dutch Shell (RDSB) retreated 0.3% to £25 after terminating its deal with Dansk Olieselskab regarding the sale of assets.
Upgrades from broker Bank of American Merrill Lynch lifted shares in BT (BT.A) by 1.2% and airline EasyJet (EZJ) by 1.9%.
UK manufacturing growth fell from 58.2 in November to 56.3 in December as output, new orders and employment slowed, according to Markit. A figure of over 50 implies growth while one under 50 suggests contraction.
Brent crude oil was down 0.7% at $66.38 per barrel. Gold gained 0.4% to $1,311 per ounce and copper fell 0.4% to $3.27 per pound.
Wall Street enjoyed a stronger start to 2018 than the UK markets, driven higher by optimism over President Donald Trump's tax reform, which is anticipated to boost the economy.
The tech-focused Nasdaq index benefited from a 1.2% rally to 6,986 around 4:50pm UK time, while the Dow Jones and S&P 500 experienced minor gains.
MID AND LARGE CAP RISERS AND FALLERS
Shares in catering specialist Compass (CPG) dropped 1% to £15.83 on the tragic news that CEO Richard Cousins passed away in a plane accident in Australia on New Year's Eve. Cousins was expected to retire in March. His successor Dominic Blakemore's appointment was moved forward following his unexpected death.
British Airways owner International Consolidated Airlines (IAG) acquired the assets of Austrian airline NIKI, which used to be part of the now-defunct Air Berlin. The company said the assets included up to 15 A320 family aircraft and slots at various airports such as Vienna, Munich and Zurich. Shares in the company rose 1.9% to 663.2p.
Banking and investment group BGEO (BGEO) announced its real estate division bought a 50% stake in a boutique hotel in Tbilisi for $4.1m, although the stock was static at £35.52.
New leadership at St James's Place (STJ) helped the firm nudge 0.5% higher to £12.31. Andrew Croft and Craig Gentle started as chief executive and chief financial officer.
A reduced stake in electrical retailer AO World (AO.) by Baron Capital Management from 4.99% to 1.39% concerned investors as the stock slipped 4.1% to 105.4p.
SMALL CAP RISERS AND FALLERS
On AIM, fancy cakes maker Patisserie (CAKE) sweetened 7.1% to 378.5p on media speculation that it was considering a takeover offer for Gail's Bakery. Patisserie chairman Luke Johnson owns Gail's parent firm Bread Holdings. The company was reported to be eyeing a £35m fundraise to help finance the deal.
Housebuilder Inland Homes (INL) pleased the market with a bullish outlook statement including potential for significant growth this year, driven by a record level of homes under construction and a strong pipeline. Its shares jumped 3.3% to 62p.
Oncimmune (ONC) set its sights on eroding lung cancer in China through a breakthrough deal with Hong Kong firm Genostics, helping its shares soar 22.8% to 129p.
Struggling mobile operator The People's Operator (TPOP) plummeted 75.2% to 0.1p after its share suspension was lifted. Last month, the company completed a heavily discounted fundraising as a last resort to keep trading.
Premier African Minerals (PREM) revealed its RHA project did not achieve September's guidance for achieving profitable production by the end of 2017. The tungsten producer also decided a separate listing should be sought for the Zulu lithium project. Investors were concerned about the company's outlook as the shares crashed 29.5% to 0.2p.