Oil prices crashed after the International Energy Agency warned of oversupply - only a week after it reported that there was higher than expected oil stockpiles.
Brent crude oil slid 3.7% lower to $46.89 per barrel on the news, which weighed on oil giants BP (BP.) and Shell (RDSB).
The dominating oil stocks fell sharply by 1.8% and 1.7% respectively and dragged the FTSE into the red. The blue-chip index retreated 0.3% to 7,474.
Gold glittered at $1,275 per ounce and copper was down 0.5% to $5,688 per tonne.
UK unemployment stood at 4.6% - equivalent to 1.53 million people, which was down from 5% a year ago according to the Office for National Statistics.
While this data was the lowest since 1975, there were concerns as average pay fell by 0.6% in real terms in the three months to April as prices continued to rise.
Wall Street opened lower as a monthly fall in retail sales and weak oil prices led to subdued investor sentiment. On Wednesday, the S&P 500 nudged 0.1% down to 2,436.
FTSE 100 RISERS AND FALLERS
In corporate news, cigarette seller British American Tobacco (BATS) failed to make a splash at £54.50 after announcing it expected profit growth to be weighted in the second half of the year. The company said this was due to the phasing of volume shipments, product investments and marketing spend.
BHP Billiton's (BLT) dispute with activist shareholder Elliot Management continued as the shareholder called for an 'upgrade' of its board of directors. BHP also said it was in the process of electing a new chairman. The stock remained broadly unmoved at £12.06.
In the financial sector, banking giant Standard Chartered (STAN) said it wanted to expand its US presence. Observers speculate this could be part of a plan to ensure it maintains euro clearing powers that might move away from the UK after it leaves the EU.
FTSE 250 RISERS AND FALLERS
Acacia Mining (ACA) said majority shareholder John Thornton and the Government of Tanzania would try and find a 'mutually acceptable solution' concerning the ban on Acacia exporting gold and copper concentrates. The ban emerged after Acacia was accused of under reporting its gold exports. Investors were relieved as the stock rose 5.3% to 286.8p.
The travel business continued to drive book seller WH Smith (SMWH) forward, helping to balance declining sales on the high street. In the 15 weeks to 10 June, group sales were up 2% but like-for-like sales were flat. Shares in the firm nudge 2.9% higher to £17.94.
Housebuilder Bellway (BWY) reported a robust trading performance as demand did not slow in the run up to the snap UK general election on 8 June. The stock advanced 1.8% to £29.
Elsewhere, next-generation estate agency Purplebricks (PURP) clarified it would target California for its US launch thanks to 'strong housing and economic fundamentals.' The market was already aware of the planned US launch and the stock fell 3.9% to 398.7p.
Power generator supplier Aggreko (AGK) acquired Indonesia-based power rental firm KBT for $32.8m, helping the stock to tick 2.6% higher to 910.6p.
SMALL CAP RISERS AND FALLERS
Investors ran for the exits at Entu (ENTU) after it announced that losses before interest, tax, depreciation and amortisation in the first half of the year was anticipated to widen to £2.2m to £2.4m. Shares in the double glazing firm plummeted 32.2% to 18.1p.
Things were going better over at marketing services company St Ives (SIV). The stock rallied 32% to 49.5p following a stronger than expected trading performance despite challenging conditions.
European budget airline Ryanair (RYA) failed to take off at €18.31 despite media speculation it was in talks with Boeing for its proposed new 737 MAX 10 airliner.
Investors toasted a new contract win at WANdisco (WAND), triggering a 10.9% boost in the share price to 510p. The deal was with a major American multinational retailer and valued at $2m.
On the AIM market, Mulberry (MUL) was one of the main fallers.
Handbags designer Mulberry benefitted from a 21% jump in pre-tax profit, but investors were worried about lower sales, which pushed the stock 4.2% lower to £11.