As the proposal of new gambling legislation raised fears that tax breaks could be removed, the bookmakers were struggling to find backers yesterday with both Ladbrokes and William Hill finishing off the pace.
The two were knocked back 2.5p to 144.1p and 8.4p to 215.9p respectively on the mid-tier index after the Department for Culture, Media and Sport (DCMS) announced plans to force all offshore gambling companies operating in the UK to apply for a Gambling Commission licence.
Although no details on accompanying tax measures were released, Evolution Securities' James Hollins noted the DCMS's statement that offshore operators were not "bearing a fair share of the costs of regulation", saying this "firmly implies... that taxation will become part of the new legislation".
With both groups' having moved some of their operations overseas, the cost to Ladbrokes and William Hill could be as much as £30m each year, the analyst estimated, "thus representing a clear medium-term disruption".
However, the analyst added that he believed both "could recoup the majority of this lost income from the market share gains that would follow", saying "the smaller, weaker-branded operators will end up with unworkable financial models".
Betfair, which moved some of its operations to Gibraltar earlier in the year, was also lower, slipping 24p to 682p.
A rush of activity from the ratings agencies late on Wednesday, with Moody's warning the US it could cut its debt rating while Fitch downgraded Greece once again, meant the FTSE 100 closed 59.48 points worse off at 5,846.95.
The banking sector was largely behind, but Lloyds Banking Group managed to buck the trend, easing forwards 1.42p to 45.82p. It was given a boost by Goldman Sachs, which said it expects the company "to deliver high steady-state returns and payout ratios, supported by its dominant market position in the UK retail banking market".
With investors keen on the security of gold, the yellow metal managed to reach a new record high yet again. Unsurprisingly, it gave the gold miners a boost, pushing Fresnillo and Randgold Resources up 75p to 1,595p and 25p to 5,465p respectively while Petropavlovsk powered forwards 26.5p to 823.5p.
Vague bid speculation around Rexam meant the can manufacturer was fizzing up the leaderboard, and it finished 1.8p higher at 378.9p as market gossips suggested it could receive an offer worth up to 495p a share. Its peers Ball and Crown were both being suggested as potential aggressors, though traders were highly sceptical over whether such a deal would gain regulatory approval.
Elsewhere, BP ticked up 1.45p to 457.95 following the news that its US peer ConocoPhillips is splitting itself in two. City scribblers have previously suggested that BP could benefit from such a move itself, with Investec in May recommending a "radical three-way demerger".
At the other end, Petrofac slid 57p to 1,445p after Barclays Capital cut its advice on the oil services group to "underweight". Meanwhile, investors were checking out of InterContinental Hotels following disappointing figures from Marriott International, which reduced its earnings expectations for the year, leaving its British peer 41p behind at 1,241p.
Some major management changes were forcing moves on the FTSE 250, as the news that Premier Foods had managed to poach Kraft's top man in Europe saw the Hovis owner surge forwards 3.56p to 21.66, a shift of nearly 20 per cent. Mike Clarke will become Premier's chief executive at the start of September, and Panmure Gordon welcomed the appointment, saying he "has the brand credentials that the market was looking for".
Unfortunately for Mitchells & Butlers, there was a rather less cheerful reaction to its announcement that the pubs group's third chairman in 18 months had walked out the door. The company, which currently does not have a chief executive, was pegged back 10.6p to 295p as Peel Hunt slapped a "sell" rating on its shares.
Charter International's revelation that Melrose had raised its takeover approach to 840p a share pushed the equipment maker up 12p to 829p. Recent speculation has suggested the buyout company – down 2.2p to 359.8p – could face competition from a rival aggressor, while market voices said the new offer was still too low and that they expected Melrose may end up having to pay between 850p and 900p a pop.
Elsewhere, the new turnaround plan from Yell failed to excite investors, as the Yellow Pages publisher retreated nearly 25 per cent. The decline of 2.6p to 8.4p on the small-cap index came after the group said it was going to become an online hub for local companies, adding that it expected three-quarters of its operations to be online by the end of the four-year plan.