By Atul Prakash

LONDON (Reuters) - The top share index ended 1.8 percent lower on Wednesday, as weak results from J Sainsbury (SBRY.L: Quote, Profile, Research) raised questions about consumer spending, while a grim financial sector outlook brought down housebuilders and banks.

The FTSE 100 .FTSE closed down 105 points at 5,756.9 points, after rising 1.2 percent on Tuesday.

"Investors are clearly nervous, which makes them cautious. They are nervous about the outlook for the real economy. It's a conflict between higher inflation and lower growth," said Peter Dixon, UK economist at Commerzbank.

"The market could probably go lower further, but not hugely lower. The summer is going to be a period of great uncertainty as we start to get more company news regarding second quarter results," he added.

Housebuilder Persimmon (PSN.L: Quote, Profile, Research) was the top loser on the FTSE 100, down 8 percent while FTSE 250 .FTMC-listed Redrow (RDW.L: Quote, Profile, Research) slipped 17.5 percent after UBS cut its price target to 169 pence from 208 pence.

Housing market worries were exacerbated on Tuesday when data showed consumer prices rose at their fastest in 10 years.

"There's concern about downward pressure on economic growth," said Andrew Bell, analyst at Rensburg Sheppards.

"And the prospects for housebuilders are discouraging with (UK) rates not going down in the foreseeable future, worries about falling house prices, and misery on the trading outlook."