London stocks were still firmly in the red by midday on Tuesday amid ongoing worries about a potential AI bubble ahead of this week's delayed non-farm payrolls report and third-quarter earnings from US chipmaker Nvidia.
The FTSE 100 was down 1.2% at 9,560.49.
Adding to worries about a potential AI bubble were comments from the head of Google parent Alphabet, who told the BBC no company would be immune if the bubble bursts.
Sundar Pichai said while the growth of AI investment had been an "extraordinary moment", there was some "irrationality" in the current boom in the sector. Asked in an interview with the BBC whether Google would be immune to the impact of the AI bubble bursting, Pichai said the tech giant could weather that potential storm but also issued a warning.
"I think no company is going to be immune, including us," he said. "We can look back at the internet right now," referring to the dotcom crash of 2000. "There was clearly a lot of excess investment, but none of us would question whether the internet was profound.
"I expect AI to be the same. So I think it's both rational and there are elements of irrationality through a moment like this."
Russ Mould, investment director at AJ Bell, said: "Another downbeat session on Wall Street yesterday was followed by heavier selling in Asia today and that set the scene for a meaningful drop in the FTSE 100.
"As fears over an AI bubble build, there has rarely been more riding on an individual set of results than Nvidia's on Wednesday.
"Even a mild disappointment could reinforce the market's worries and spark a wider sell-off. A raft of economic data from the US which was delayed by the government shutdown is set to be released through the course of this week - including September's jobs numbers.
"While these figures will cover a period which is now in the rearview mirror, they may still have some influence on how much the Federal Reserve is prepared to put its foot to the floor with rate increases.
"A December cut was firmly being priced in by the market until recently but that now looks less certain after comments from Fed officials."
In equity markets, miners and gold miners were the worst performers, with Fresnillo, Anglo, Antofagasta, Glencore, Hochschild and Endeavour all lower.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Gold extended its slide, underscoring a growing correlation with risk assets as it fell in tandem with equities and even speculative plays like Bitcoin, now below $90,000 for the first time in six months, as markets reassess rate cut hopes.
"Traditionally a safe haven, gold's new found inability to decouple from other asset classes could tarnish its defensive role heading into year-end."
Banks were also weak, with Barclays, HSBC and NatWest down.
Housebuilder Crest Nicholson tanked as it said that full-year profits would miss previous guidance, pinning the blame on a subdued housing market and uncertainty surrounding government tax policy ahead of the Autumn Budget.
Elsewhere, Convatec fell after Novo Holdings - which had been its largest shareholder - exited its position in the medical technology firm via a placing of 155m shares.
FirstGroup tumbled after it reported a sharp rise in first-half net debt and said it expects "modest" growth in adjusted earnings per share in FY 2026.
On the upside, ICG surged to the top of the FTSE 100 after French asset manager Amundi agreed to take a near 10% in its British rival. The news came alongside the company's interim numbers, which showed a 6% uplift in fee-earning assets under management, to $84bn.
Imperial Brands rose as it posted an uplift in sales and earnings, supported by higher prices and growing demand for the tobacco group's range of next general products. British American Tobacco also gained.
Greencore rallied after saying it had struck a deal to sell its Bristol soups and sauces site to Compleat Food Group to meet regulatory conditions on its Bakkavor takeover as it also posted a jump in annual profit. Bakkavor also gained.
Market Movers
FTSE 100 (UKX) 9,560.49 -1.19%
FTSE 250 (MCX) 21,456.81 -1.07%
techMARK (TASX) 5,499.65 -0.63%
FTSE 100 - Risers
ICG (ICG) 2,000.00p 5.88%
Imperial Brands (IMB) 3,235.00p 2.60%
Rightmove (RMV) 553.40p 0.55%
BAE Systems (BA.) 1,813.50p 0.47%
Smurfit Westrock (DI) (SWR) 2,576.00p 0.43%
Sainsbury (J) (SBRY) 319.40p 0.38%
AstraZeneca (AZN) 13,636.00p 0.32%
British American Tobacco (BATS) 4,170.00p 0.26%
Centrica (CNA) 166.60p 0.21%
Tesco (TSCO) 438.30p 0.18%
FTSE 100 - Fallers
Anglo American (AAL) 2,694.00p -3.58%
Standard Chartered (STAN) 1,543.00p -3.44%
Convatec Group (CTEC) 231.00p -3.43%
HSBC Holdings (HSBA) 1,057.60p -3.27%
Barclays (BARC) 397.65p -3.20%
International Consolidated Airlines Group SA (CDI) (IAG) 369.70p -2.97%
Fresnillo (FRES) 2,270.00p -2.91%
Antofagasta (ANTO) 2,661.00p -2.81%
NATWEST GROUP (NWG) 582.20p -2.67%
Schroders (SDR) 377.40p -2.53%
FTSE 250 - Risers
Bakkavor Group (BAKK) 225.00p 2.97%
Sirius Real Estate Ltd. (SRE) 96.85p 0.89%
Pets at Home Group (PETS) 203.60p 0.49%
Oakley Capital Investments Limited (DI) (OCI) 570.00p 0.35%
Cranswick (CWK) 4,875.00p 0.31%
Vietnam Enterprise Investments (DI) (VEIL) 760.00p 0.26%
Just Group (JUST) 213.50p 0.23%
Pollen Street Group Limited (POLN) 886.00p 0.23%
Syncona Limited NPV (SYNC) 100.20p 0.20%
Plus500 Ltd (DI) (PLUS) 3,020.00p 0.20%
FTSE 250 - Fallers
FirstGroup (FGP) 174.70p -12.82%
Wizz Air Holdings (WIZZ) 1,022.00p -4.58%
Diversified Energy Company (DEC) 1,145.00p -3.94%
Great Portland Estates (GPE) 309.00p -3.89%
Oxford Nanopore Technologies (ONT) 123.70p -3.13%
JPMorgan Japanese Inv Trust (JFJ) 713.00p -3.13%
The Renewables Infrastructure Group Limited (TRIG) 73.70p -3.03%
Trainline (TRN) 252.00p -3.00%
Baillie Gifford Japan Trust (BGFD) 888.00p -2.84%
Ocado Group (OCDO) 212.10p -2.62%