UK stocks fell on Tuesday as heavyweight oil shares and drug maker GlaxoSmithKline slipped, but utility Severn Trent leapt to a record high after announcing plans to sell its waste-disposal business.
The FTSE 100 has stalled in recent weeks after climbing above 6,000 points for the first time since early 2001, and analysts suggest the index might have to fall back several hundred points before making any substantial move higher.
Other asset classes have also started to look more reasonable value for money, said Neil Parker, market strategist at Royal Bank of Scotland.
"The one thing that has worked against the equity market pushing higher is that the UK bond market has been hammered, and yields have subsequently risen," Parker said. "Before it was a one-way bet, but now people are having to be more thoughtful."
The FTSE 100 closed down 19.6 points, or 0.3 percent, at 6,004.7 points. The index breached 6,000 for the first time in five years on March 17, but has only pushed as high as 6,047 since then and has repeatedly slipped back below the psychological 6,000 mark.
"What does it tell us? It tells us the market is not convinced. The market is trying to find its feet. Does it want another leg higher, or are we going to have a correction down?" Parker added.
Drug maker GlaxoSmithKline fell 1.5 percent to 1,500 pence after investment bank UBS cut its rating on the stock to "neutral" from "buy" and trimmed its share price target to 1,650p from 1,750p.
Tate & Lyle slipped 1.9 percent after consumer advocates said its Splenda sweetener could cause problems with digestion.
A group called Citizens for Health petitioned the US Food and Drug Administration to withdraw approval from the zero-calorie sugar substitute pending further investigation of possible side effects.
SEVERN RISES ON BIFFA SALE:
While the broad move was downwards, several stocks rose strongly, including Britain's second-biggest listed water company Severn Trent, which jumped 6.3 percent to head the list of FTSE gainers.
The firm said it would demerge its Biffa waste-disposal unit to focus on its core water business, and it also flagged encouraging annual results driven by higher water bills.
During the session its shares touched an all-time high at 1,220p.
Shares in defence company BAE Systems rose 3.7 percent, boosted by a report that it was not planning a multi-billion dollar bid for US defence firm L3 Communications.
Speculation that BAE might move for L3 persisted even after the company last month denied a newspaper report that it would sell its stake in Airbus and put the proceeds toward buying L3.
But losses for heavyweight oil shares including BP, which fell 1.5 percent, weighed on the market, contributing almost 12 points to the overall fall.
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