(Close): The market fell as investors reacted to disappointing figures from Asia, while M&S shares were hit by news of online delivery delays.
The FTSE 100 index closed down 70.69 points at 6,672.15.
Investor confidence was rattled by weak Chinese trade figures and data showing Japan's economy contracted by more than previously estimated.
Sainsbury's shares jumped at first after a report that an investment fund was in talks about taking a stake in the firm.
The Sunday Telegraph said the Crystal Amber fund was talking to several overseas investors about buying shares in the supermarket, and the move was part of a plan that could lead to a takeover bid being made.
Shares in Sainsbury's rose 1.8% in early trade. but by the end of the day they were 1.1% lower.
Shares in Intercontinental Hotels fell 1.5%. The firm said it had agreed to sell its Paris-Le Grand hotel for €330m (£260m).
Esure Group's shares dropped 3.6% after the company said it had agreed to buy the 50% of price comparison website GoCompare it does not already own for £95m.