* FTSE 100 down 0.5%, FTSE 250 down 0.3%
* U.S. tariffs on European Union dampen sentiment
* Blue-chip index tracking worst week in almost a year
* Ted Baker sinks after profit warning (Adds news items, analyst comment, updates share price)
Oct 3 (Reuters) - London's FTSE 100 lost more ground on Thursday after a combination of Brexit worries and the approval of U.S. trade tariffs on a list of European goods led to its worst day in more than 3-1/2 years in the previous session.
Small-cap fashion retailer Ted Baker Plc tanked to a more than 8-1/2 year low after its second profit warning this year.
The main index, which had suffered its worst one-day drop since before the 2016 Brexit vote on Wednesday, was dragged 0.5% lower, mainly due to a more than 1% drop in oil majors Shell and BP.
Stocks trading ex-dividend also weighed on the blue-chip index, with packaging firm DS Smith, tobacco firm BAT , ad firm WPP, housebuilder Taylor Wimpey and retailer Kingfisher dropping between 2.6% and 5%.
The mid-cap FTSE 250 was roughly flat by 0741 GMT, with most investors wary after Prime Minister Boris Johnson made a final Brexit pitch to the European Union.
A slew of shockingly weak U.S. economic data, lingering fears over the Sino-U.S. trade dispute and heightened no-deal Brexit jitters have spooked traders this week, and the World Trade Organization's approval of U.S. tariffs on European goods has further fanned fears.
"With markets already looking vulnerable over concerns about a manufacturing recession starting to bleed into a slowdown in the services sector, the timing of the WTO ruling could not have come at a worse time," CMC Markets analyst Michael Hewson said.
The FTSE 100 is on course for its steepest weekly fall in nearly a year.
News-driven moves saw Ted Baker slump 35%, on course for its worst day ever, after it posted a first-half pre-tax loss and warned that unseasonably warm weather, heavy discounting by rivals and weak consumer demand would hit full-year profit.
"Today's first-half update from Ted Baker is a massive disappointment to those who felt that the company's problems were behind it," Hewson said.
Ted Baker's stock has lost almost two-thirds of its value this year and its chief executive officer said the company was facing the most difficult trading conditions in decades.
Shares of online trading platform CMC Markets climbed 6.6% after it forecast a jump in annual earnings.
Mid-cap gold miner Centamin lost 4.8% after it issued a production forecast for the third quarter and said its chief executive officer would retire. (Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Shounak Dasgupta)