Sterling hit its highest level since November on reports that Labour will support a move to prevent the UK leaving the EU without a deal in March, leaving the FTSE 100 in the doldrums.
The blue chip index fell 0.8% to 6,842 with Germany's DAX also in negative territory, down 0.2%.
Wall Street initially enjoyed some gains before easing back at around 5pm UK time.
Brent crude slid 1.3% to $60.70 per barrel.
MID AND LARGE CAP RISERS AND FALLERS
UK fashion brand Burberry rose 2.9% after its same-store sales in the third quarter slowed from a year earlier to 1%.
Plastic packaging supplier RPC added 4.9% on news that it had accepted a £3.32bn takeover bid from private equity firm Apollo Management.
Pub chain JD Wetherspoon was broadly unmoved at £11.93 as it warned rising costs would offset a bumper sales performance to send its profits lower.
Book, stationary and snack retailer WH Smith gained 2.6% to £19.24 after it boosted year-to-date sales by 6%, buoyed by strength in its travel division.
Challenger bank Metro Bank tumbled 39% to £13.45, despite it forecasting a more than doubling in annual profit, as profit 'softened' in the last quarter.
Computer services provider Computacenter rallied 9.8% to £11.18 as it forecast annual profits ''marginally ahead' of its expectations.
Asset and corporate services provider Sanne slumped 17.7% on announcing the departure of its CEO amid a profit performance expected to be 'broadly in line' with its expectations.
SMALL CAP RISERS AND FALLERS
Lifestyle fashion retailer Joules dipped 3.5% to 250p, even as it posted a 15% rise in underlying first-half profit.