SKY shares topped London's blue chip market on Wednesday on the back of a bidding war for the company but that was not enough to prop up the wider market which suffered the effects of investor profit-taking.
The FTSE 100 ended the day down 0.6% or 46.08 points at 7,379.32 points, with similar losses felt across Europe, where the French Cac 40 fell nearly 0.6% and the German Dax dropped 1%.
David Madden, a market analyst at CMC Markets UK, said it was partly down to the current appeal of safe haven assets.
"Profit-taking has dented European equity markets. Some stocks saw multi-month highs yesterday, and they are now in retreat.
"The increase in US government bond yields has given traders an incentive to seek out safer assets," he explained.
Sky shares meanwhile ended the day up 51p at 1,359p after US media giant Comcast unveiled a £22 billion rival bid that threatens 21st Century Fox's £11.7bn attempt to take full control of the pay-TV group.
Jasper Lawler, head of research at London Capital Group, said a bidding war had not been fully priced in to the Sky share price, and Comcast now has a good chance of coming out on top given the complications surrounding Fox's offer.
"Media plurality is the main stumbling block for Murdoch's approach and in part why the Sky board has withdrawn its recommendation," he explained.
"Regulators should in theory happily wave the merger through if Comcast make the right noises on the independence of Sky News."
In currency markets, the pound was mixed, falling 0.3% against the US dollar to 1.393 and rising 0.2% versus the euro to 1.144.
Brent crude prices dropped nearly 0.4% to around 73.57 US dollars per barrel, knocked by US government data pointing to higher oil and gas stockpiles, which fanned worries about global oversupply.
In UK stocks, GlaxoSmithKline shares dropped 50p to 1,412p after reporting a 15% drop in operating profit to £1.24 billion and warning investors that sales of a key respiratory drug in its portfolio were likely to slump. It said competitive pressures in the respiratory drug market meant sales of its asthma treatment Advair would fall by 30% in 2018.
The company's earnings per share for the full year, which fell 33% in the quarter to 11.2p, would depend on Advair's success.
If no competing drug is marketed in the US, Glaxo's earnings per share could grow by between 4% and 7%.
However, if a competitor enters the market, earnings per share could fall by 3%. The pharmaceutical giant said it was unable to give a reliable forecast for its future results.
Lloyds Banking Group fell 1.12p to 65p after taking another £90 million hit for payment protection insurance (PPI) mis-selling claims, bringing its total bill for the saga to an eye-watering £18.8 billion.
It came as the bank reported a 23% rise in bottom line profits to £1.6 billion.
Whitbread edged lower by 9p to 4,177p after bowing to pressure from an activist investor and announcing plans to spin off Costa Coffee into a separately-listed business from its Premier Inn brand.
Shire shares slumped 110p to 3,820p. It came as the pharma giant changed its tune and recommended a £46 billion takeover bid from Japan's Takeda following a number of rejected offers.
Metro Bank suffered a 258p drop in its share price to 3,260p despite reporting a 456% surge in bottom-line profits in the first quarter, as investors turned attention to the bank's capital targets and higher costs.
The biggest risers on the FTSE 100 were Sky up 51p at 1,359p, Imperial Brands up 83.5p at 2,472p, British American Tobacco up 106p at 3,850p, and CRH up 56p at 2,543p.
The biggest fallers on the FTSE 100 were Ashtead Group down 105p to 2,010p, Anglo American down 72.6p at 1,675p, Croda International down 181p to 4,438p, GlaxoSmithKline down 50p at 1,412.2p.
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