Retreating mining and energy stocks outweighed modest gains from defensive pharmaceuticals, pushing Britain's top share index down 0.5 percent by close on Wednesday. The FTSE closed down 26.22 points at 4,890.58 after hitting a near 11-month closing high at 4,916.80 on Tuesday, after reassuring economic data from the United States.
Mining stocks were the biggest drag on the index, retreating for a second day, pressured as Chilean copper miner Antofagasta posted lower-than-expected first-half earnings. Antofagasta slipped 4.8 percent while Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo lost between 2.3 and 5.2 percent.
However data on both sides of the Atlantic helped to sustain a sense that the global economy is rapidly emerging from recession. Sales of US single-family homes rose for a fourth straight month in July to set their fastest pace of growth since last September while German business morale rose to its highest level in nearly a year.
The FTSE 100 has gained 6.1 percent so far this month and is up 10.3 percent this year after rebounding 42 percent from an all-time low in March. But these strong gains seem to have sated market appetite for further stock purchases despite the strong data, and investors paused for breath.
"There's a reluctance to chase prices up because everyone is hoping that they are going to come back," said Jim Wood-Smith, head of research at Williams de Broe. "But there are a lot of reasons why stocks have risen, with data getting better on an almost exponential basis ... today the market is just a little tired."
Oil majors weighed as crude prices slipped to $71 a barrel after sliding 3 percent from 10-month highs on Tuesday, as industry data showed an unexpectedly large increase in crude inventories last week. BG Group, BP, Royal Dutch Shell and Cairn Energy fell 0.5-4.1 percent.
Tullow Oil sank 3 percent, after the British-based oil explorer reported an 83 percent drop in first-half profit on lower crude prices and production. Banks were mixed, with Royal Bank of Scotland performing strongly, up 5.3 percent.
The state-backed lender is poised to slash retirement benefits for staff in an attempt to save 1 million pounds ($1.64 million) in annual costs and cut future liabilities by 500 million pounds.
Standard Chartered added 1.1 percent but heavyweight HSBC fell 0.4 percent.
Diageo, the world's biggest spirits group, was up 2.6 percent ahead of results on Thursday, with Morgan Stanley upping its stance to "overweight" late on Tuesday, with Bernstein also having hiked its stance on the firm. Brewing giant SAB Miller rose 1.3 percent supported by strong first-half results from Dutch peer Heineken.
Other stocks perceived as defensive were also in favour, with drugs firms AstraZeneca and GlaxoSmithKline climbing 0.2 and 0.5 percent, respectively.
Serco was the strongest-performing company on the index, up 6 percent after the support service firm's profits came in ahead of forecast and it predicted double-digit revenue growth in coming years.
Meanwhile, ex-dividend factors clipped 0.17 point off the FTSE 100 index, with Eurasian Natural Resources, Fresnillo and InterContinental Hotels losing their dividend attractions on Wednesday.