The FTSE 100 <.FTSE> index sank 0.6 percent, slightly outperforming a sharp slump in European stocks, while mid-caps <.FTMC> dropped 1.1 percent.
Burberry (>> Burberry Group) fell 9.4 percent, its biggest one-day loss since September 2012, on the high cost of its plans to move upmarket by focusing on leather goods and fashion and cutting sales to non-luxury stores.
"Today's results were overshadowed by the strategic reset [...] which implies no sales and earnings growth in 2019 and 2020," said Berenberg luxury analysts.
"Despite the short-term downside risk to Burberry's earnings, today's strategy update left us feeling confident about the CEO's vision," they added.
Burberry's shares had gained 34 percent so far this year, outstripping the FTSE 100 which has gained just over 5 percent.
In a weak day for retailers, Sainsbury's (>> J Sainsbury) shares fell 1.8 percent after lower sales confirmed investors' fears about inflationary pressures on consumers.
"A 2 percent first-half profit beat and confirmed full-year guidance does little to change our concerns around Sainsbury's vulnerability to a weakening UK consumer outlook," said Jefferies analysts.
Marks & Spencer (>> Marks & Spencer Group) also fell 2.4 percent, while small-cap department store Debenhams (>> Debenhams Plc) sank 6.9 percent.
Housebuilders also suffered, with shares in Persimmon (>> Persimmon), Taylor Wimpey (>> Taylor Wimpey) and Barratt Developments (>> Barratt Developments) falling by 2.8 percent to 3.9 percent after a survey showed house prices in Britain were no longer rising.
Weak results added to price pressures for mid-cap builder Redrow (>> Redrow plc), which was down 6.6 percent . Bovis Homes (>> Bovis Homes Group), Crest Nicholson (>> Crest Nicholson Holdings PLC) and Bellway (>> Bellway) fell 4.9 to 5.7 percent.
"Redrow's announcement will do little to cool any jitters around market sentiment on new housing," said analysts at Davy Research.
Business media company Informa (>> Informa PLC) was the top gainer, up 4.3 percent. The company reported revenue rose in the first 10 months of 2017, buoyed by its global exhibitions business.
Outside the blue chips, a trading update weighed on Hikma (>> Hikma Pharmaceuticals), which dropped 5.5 percent after cutting its generic sales forecast again. Its partner Vectura Group (>> Vectura Group PLC) fell 7.7 percent.
Both companies are in a dispute with the U.S. Food and Drug Administration over plans to launch a generic copy of GlaxoSmithKline's (>> GlaxoSmithKline) lung drug Advair in the U.S. market.
Inmarsat (>> Inmarsat) sank 9 percent after the satellite firm narrowed its guidance for full-year earnings.
(Reporting by Kit Rees, editing by Larry King and Alexander Smith)
By Kit Rees and Helen Reid
Stocks treated in this article : AstraZeneca
, Taylor Wimpey
, Burberry Group
, Vectura Group PLC
, Barratt Developments
, Marks & Spencer Group
, Redrow plc
, Bovis Homes Group
, J Sainsbury
, Hikma Pharmaceuticals
, Debenhams Plc
, Crest Nicholson Holdings PLC
, Informa PLC