FTSE 100 sinks while pound jumps
London's main share index closed nearly 1% down after the political controversy in the US surrounding President Trump continued to hit investor confidence.
The row over the firing of FBI director James Comey has led to growing scepticism about Mr Trump's ability to deliver tax and regulatory reform.
The pound rose above $1.30 to its highest level since September, helping to pull the FTSE lower.
US shares fell heavily on Wednesday.
In London the FTSE 100 dropped 67.05 points to 7436.42.
Sterling was boosted by stronger-than-expected UK retail sales data, while also benefitting from the weakness of the dollar.
The pound was up 0.25% against the dollar at $1.3003, and was 0.59% higher against the euro at 1.1687 euros.
The sell-off in shares in London was echoed across Europe, with Germany's Dax index down 0.33% and France's Cac 40 dropping 0.53%.
"Stocks are sliding again today as traders are still spooked by the latest scandal surrounding Donald Trump," said David Madden, market analyst at CMC Markets UK.
"The row between Mr Trump and the FBI is still on traders' minds and while this is hanging over the market. I can't see sentiment changing anytime soon."
Despite the falls, there was good news for some UK shares.