A sudden sell-off, late in the session, condemned the London market to its biggest weekly decline since early March.

As investors reappraised Thursday’s US GDP data, reacted to news that consumer sentiment had slipped this month, and squared positions on the last trading day of October, the FTSE 100 fell 93.17 points, or 1.8 per cent, to 5,044.55.

That left the blue-chip index down 3.8 per cent on the week. The last time it fell by more than that was the week ending March 6, when it dropped 7.82 per cent. Elsewhere, the FTSE 250 lost 76.7 points, or 0.8 per cent, to 8,885.77.

Traders said they expected markets to remain jittery ahead of next week’s central bank meetings in the US, UK and Europe. These could provide clues as to when the interest rate tightening cycle might begin.

Mining stocks were the biggest drag on the London market. As the dollar rallied, commodity prices went into reverse, hitting the likes of Xstrata, down 6.8 per cent to 882½p, Vedanta, off 5.6 per cent to £20.93, and Kazakhmys, which dipped 8.2 per cent to £10.89.

Heavyweight oil stocks BP, 2.4 per cent lower at 572.3p, and Royal Dutch Shell, 2.9 per cent weaker at £17.60, also weighed on the index, as the crude price dropped $2 a barrel because of the stronger dollar. Drug company Shire managed to buck the weak trend, rising 4.7 per cent to £10.72 after third-quarter results topped City forecasts thanks to higher sales of its attention deficit disorder drugs.

Retailers also closed higher after John Lewis reported a sixth consecutive week of rising sales. Next, which reports results next week, rose 1.1 per cent to £17.95, while Marks and Spencer, which is also reporting, firmed 0.7 per cent to 342½p.

Lloyds Banking Group added 1.2 per cent to 87.03p as analysts upgraded in the wake of Thursday’s statement from the bank, which eased fears about an EU-mandated break-up of the part-nationalised lender.

Lifting his rating to “neutral”, Credit Suisse’s Jonathan Pierce said that if Lloyds was only forced to sell Intelligent Finance, Cheltenham & Gloucester and Lloyds TSB Scotland it would be a “good result”.

“We believe these businesses account for just £25bn (6 per cent) of the group’s deposits, and earnings dilution would be limited to a few hundred million pounds, on our numbers,” he said.

However, traders also noted reports that the government was seeking a payment of £2.5bn from Lloyds to allow to it drop out of its toxic asset insurance scheme.

Among the mid caps, Yell, the heavily indebted directories group, added 4.3 per cent to 51¼p on news that it needed acceptances from just two more of its lenders to push through its comprehensive refinancing plan.

Soco International fell 6.5 per cent to £12.92 after Citigroup cut its rating on the oil exploration and production company to “sell”, citing valuation. Marc Kofler said Soco’s share price had been supported by the takeover speculation that has swept the oil sector this year.

“Our downgrade is influenced by a full valuation and a view that the next six months is likely to be void of material newsflow, with the rump of the 2010 exploration campaign not set to kick off until the second half of the year,” Mr Kofler said.

National Express improved 1.2 per cent to 325p even though its biggest shareholder, Spain’s Cosmen family, accused the bus and train operator of lacking a strategy after it abruptly ended takeover talks with Stagecoach, down 1.3 per cent to 144.8p.

“Given such a high-profile statement, is it feasible to push ahead with a rights issue?” asked Collins Stewart’s Andrew Fitchie. “It is going to be a tough one – £300-400m to be raised against a market cap of £482m.”