The pound soared after a survey indicated a strong rebound in manufacturing activity during August.
The pound rose 1% to $1.327 and was up nearly 1% against the euro at â‚¬1.187. The rise came after the Purchasing Managers' Index for manufacturing jumped to a 10-month high.
The compilers of the survey said the weakness of the pound following the Brexit vote had boosted exports.
However, it had also increased companies' costs.
On the stock market, shares of housebuilders were again in demand, with Berkeley Group up nearly 4%, Taylor Wimpey nearly 3% higher and Persimmon up by 2.5%.
Vodafone, GlaxoSmithKline and Shell were among the biggest fallers, all dropping by between 2% and 3% in value.
(Close): In London, the FTSE 100 share index closed 36 points lower at 6,746.