China's second currency devaluation in two days hammered shares in Asia-focused companies on Wednesday.
Luxury fashion house Burberry (LON:BRBY) fell 40p to 1496p as traders worried that Chinese consumers would have less spending power.
Shares in upmarket European car makers dropped on fears of lower demand, with BMW losing 3% to €86.6 and Daimler (XETRA:DAI) reversing 4% to €76.8.
Asia-focused bank Standard Chartered (LON:STAN) backtracked 25.7p to 881.4p.
Miners also took a hit on fears of lower demand for metals. Lonmin (LON:LMI) fell 2.7p to 38.9p, Glencore (LON:GLEN) shed 9.7p to 181.3p, BHP Billiton (LON:BLT) subsided 12.5p to 1136p and Anglo American declined 7p to 767.8p.
The FTSE 100 Index dropped 78.37 points to 6586 as the People's Bank of China devalued the yuan by 1.6 percentage points.
The currency hit four-year lows after a raft of downbeat data including another slowdown in industrial production expansion to 6%.
Analysts said the move would fuel concern that global currency wars could curb world growth prospects and delay a US interest rate rise.
Jim Reid at Deutsche Bank said: "A full-blown China devaluation would surely stop the Fed dead in its tracks and even the threat of it may slow it down."
Disappointing UK job data failed to buoy sentiment, with unemployment rising for the second month in a row.
Warwick Business School economist Ben Knight said the figures were worrying.
"The recovery has been rather unbalanced and heavily reliant on strong demand from consumers encouraged by low interest rates to spend and borrow more," he said. "The prospect of higher rates may have dampened the growth in demand.
"If the government does nothing, the danger is that the slowdown in the UK economy might become more entrenched."
There was upbeat news from Greece, however, where negotiators reached a provisional €85bn rescue deal ahead of schedule.
Oil giants pared earlier losses as the price of a barrel of US light crude moved further above the $43 mark. BP (LON:BP.) gained 1.9p to 382.4p and Royal Dutch Shell (LON:RDSB) rose 8p to 1886.5p.
In company news, publisher Pearson (LON:PSON) dropped 3p to 1170p following the sale of its stake in The Economist magazine for £469mln.
support services group Interserve (LON:IRV) backtracked 26.5p to 599p as margin performance in UK construction fell short of its medium-term expectations.
Security group G4S (LON:GFS) softened 0.5p to 266.2p after it reported flat underlying profits in emerging markets in an otherwise upbeat first-half report.
Investors built stakes in Zoopla (LON:ZPLA) by 10.1p to 264.4p as its UK agency business returned to growth.
In small caps, shares in CentralNic (LON:CNIC) jumped after Proactive Investors broke the story that Google’s name change to Alphabet included changing the domain name to abc.xyz.
The register for the .xyz domain is run by CentralNic although it is unclear how much it stands to make from the domain. Shares climbed 22.6% to 51.5p.
Elsewhere, Kibo Mining (LON:KIBO) said a second phase study for the coal mine at its Mbeya thermal power project in Tanzania has improved on the original concept in key areas.
In particular, the all-in cost margin improved to between 49% - 62%, from 38% - 45%, and compares with the 25% usually considered "healthy" for this type of project. Shares jumped 15.15% to 4.75p.
ServicePower (LON:SVR) has won new contracts with three major North American companies, boosting it by 0.4p to 5.5p.
Conversely, wood chip provider Active Energy (LON:AEG) has been hit by a double whammy of a temporary spike in local timber prices and some production line difficulties (now resolved). Shares dipped 12% to 5.5p.