At the close of business, the FTSE100 was down 31.8 points at 5,593.85 with the FTSE250 off 62.55 points at 9,879.01 and the FTSE Smallcaps 1.92 points better at 2,887.95.

NEW YORK

US stocks dropped in late morning trade, as a strengthening dollar hit commodity prices and technology stocks fell after reports Google may pull out of China.

Approaching the close in London, the Dow Jones Industrial Average was down 28 points at 10,597, the S&P500 lost 7 points at 1,143 and the Nasdaq Composite dipped 19 points at 2,349.

LONDON MARKETS

With little in the way of corporate news to provide momentum, trade in London was quiet. Continued concerns over fiscal tightening in China and a strengthening dollar hit commodity issues, with miners slumping to the foot of the FTSE league table.

ENRC was the session's biggest casualty, slumping 40p at 1,133p. Xstrata was down 36p at 1,157p, while Kazakhmys lost 44p at 1,473p, Antofagasta fell 32p at 1,001p and Lonmin dipped 33p at 1,965p. Randgold Resources slid 106p at 4,878p as gold settled at $1,104 an ounce.

Oil producers fell as a strong dollar pulled the price of crude below $80 a barrel, with Shell down 11p at 1,830p, BP 0.6p lower at 619.3p and BG Group losing 15.5p at 1,171.5p.

The cigarette makers were also out of favour, with BAT falling 17.5p at 2,216p and Imperial Tobacco down 19p at 2,059p.