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World equities sank further Friday on anxiety over rising US interest rates, before the release of key US payroll data.
Sentiment also soured as speculation continued to swirl over an alleged money-laundering scandal at Denmark's Danske Bank.
Around midday, London's benchmark FTSE 100 index was down 0.6% compared with Thursday's closing level.
In the eurozone, Frankfurt's DAX 30 index also fell 0.6% and Paris dipped 0.5%.
The euro dropped to $1.1496.
Asia also nursed fresh losses, hit by fears about the path of US rate hikes - and increasingly fraught relations between China and the United States.
Traders tracked an overnight sell-off on Wall Street, where all three main indices were rocked by another jump in the 10-year US Treasury bond yield to a fresh seven-year high.
With Treasuries the key gauge for Federal Reserve policymakers when deciding interest rate hikes, markets are growing more concerned that the cost of borrowing will rise more than previously expected and in turn hit the economy.
"Equities are under pressure as investors fears that the Fed will need to tighten policy faster than in order to keep the US economy from overheating," noted City Index analyst Fiona Cincotta.
"A rally in bond yields has spread across the globe.
"The overriding concern is that higher US interest rates will dampen growth, and this is what is causing the selloff in equities."
This week also saw Fed chief Jerome Powell deliver a hawkish assessment of rates, which added fuel to the fire for many who are predicting a quick pace of hikes.
"The main driver this week has been the abundance of strong economic data and some very hawkish comments from the Fed chairperson Jerome Powell, who suggested that they are still some way from the neutral rate and could go beyond," added Oanda analyst Craig Erlam.
The prospect of borrowing costing more, slamming the door shut on a decade of ultra cheap cash, has sent investors running for the hills.
Danske Bank tumbled by more then 10% at one point, while the broader Copenhagen stock market was down 0.7%.
The stock dived one day after the lender revealed it was being investigated by the US Department of Justice over possible money laundering related to more than $200bn transferred through the Danish lender's Estonian branch.
Denmark's largest lender is at the centre of a maelstrom and several probes after it said "a large part" of the transactions between 2007 and 2015 were "suspicious".
In a fresh twist on Friday, the Financial Times reported that Danske executed up to €8.5bn of controversial "mirror trades" for Russian customers in a single year, according to an internal memo obtained by the newspaper.
Since the start of the year, shares in Danske Bank have lost around 40% of their value.
"The weekend cannot come quick enough for Danske; to say it's been a bad week for the bank would be an understatement.
"A 10% drop its share price on Friday comes as reports surface of yet more dodgy dealings at the bank.
"It would take a brave trader to buy into this right now."
Back in London, Unilever shares dipped 0.4% after the Anglo-Dutch consumer giant axed post-Brexit plans to switch its London headquarters to Rotterdam following a shareholder revolt.
