Footsie closed 1.25% down as oil weighed along with the results from Standard Chartered (LON:STAN)
Britain's blue chip benchmark closed down 75 points at 5,962.
The Dow Jones on Wall Street is down almost 1% at the time of writing.
The top spot on Footsie belonged to the London Stock Exchange Group (LON:LSE) which surged over 13% to 2,630p as it confirmed it was in talks to potentially merge with Deutsche Boerse.
In a response to market speculation, and an earlier rise in its share price, the LSE told investors that the potential transaction would be an all-share merger of equals, into a new holdings company.
The biggest laggard was banking giant Standard, which fell almost 7% to 406.95p as the firm had its worst year since 1989 as new chief executive Bill Winters took an axe to the loans book.
The Far East-focused bank had already warned there would be no final dividend when it raised £3.3bn through a rights issue in November.
Bad debts soared 87% to US$4bn in 2015 as Winters tightened up on the bank’s lending policies with falling oil and metal prices and problems in India adding to the charges.
Alastair McCaig , at IG said: "HSBC’s figures yesterday set a worrying president for Standard Chartered but even the bears will have been taken by surprise with how far it missed its full-year expectations by. Year-on-year pre-tax profits collapsed from $5.2 billion down to just $800 million."
In addition, Brent crude plunged over 4% to US$33.33 per barrel and West Texas Intermediate tumbled almost 5%.
Although oil has shown some resilience since production talks were held last week, no nation has agreed to cut production.
BHP Billiton (LON:BLT) fell over 6% to 746.9p as it cut its dividend and posted a 54% drop in half-year profits to just under US$6bn in the six months to December 31.
BHP is the latest company in the sector to take an axe to shareholder payouts as falling commodity prices have put pressure on the industry's balance sheets.
Brexit was again a theme, as a group of more than 100 business leaders voiced their concerns in a national newspaper.
In a letter to The Times, the group warned that leaving the union would deter investment in the UK, threaten jobs and put the economy at risk.
Among the companies represented were Airbus UK, British Telecom (LON:BT.), BP (LON:BP.), Diageo (LON:DGE), EasyJet (LON:EZJ), Goldman Sachs International, GlaxoSmithKline (LON:GSK), HSBC (LON:HSBA), Rio Tinto, Rolls Royce (LON:RR.), Royal Dutch Shell (LON:RDSB), Ryanair (LON:RYA), SABMiller (LON:SAB), Siemens Manufacturing, Standard Chartered (LON:STAN), Virgin Media and Vodafone (LON:VOD).
In small caps, shares in Regency Mines (LON:RGM) soared 76% to 1.10p as the group confirmed it had taken a 5% stake in the Horse Hill oil scheme near Gatwick Airport.
Investors built stakes in housebuilder Persimmon (LON:PSN) by 2.84% to 2,029p on news of a 34% rise in annual profits, a 12% increase in forward sales and an 8% lift in legal completions.
Image Scan Holdings (LON:IGE) was 18.75% up to 2.375p as the specialist in real-time X-ray imaging for the security and industrial inspection markets reported more than £1mln of new orders this year.
Keras Resources (LON:KRS), formerly known as Ferrex, has boosted its gold production profile, as it entered a tribute agreement on a deposit in Western Australia.
Shares in the group advanced almost 4% to stand at 0.675p.
The firm has struck a 50:50 profit share agreement with Kalgoorlie Mining to exploit the Wycheproof gold deposit - a high-grade, shallow deposit on an existing mining lease with a resource of 75,600t at 2.87 g/t for 6,974 ounces.