The FTSE 100 lost ground on Wednesday as recent positivity wavered in the face of rising bond yields.
Equities in the City were slightly higher at the start of trading but drifted throughout the session.
Retail stocks, such as Sainsbury’s, were among the notable fallers as industry data showed another jump in food inflation in recent weeks.
London’s top index finished down by 0.59%, or 52.04 points, to close at 8,726.01.
Elsewhere in Europe, optimism earlier this week after US-EU trade talks appeared to be fading away, with traders looking unfavourably upon a lack of news regarding the talks.
The Cac 40 ended 0.47% lower for the day and the Dax index was down 0.66%.
In the US, Wall Street’s main indexes opened a touch higher but quickly lost ground amid weakness in the mortgage sector and caution ahead of key earnings figures from Nvidia.
“This week’s stock market rally is taking a breather ahead,” said Axel Rudolph, senior technical analyst at IG.
“Stock indices and bond yields lack direction ahead of Nvidia’s after-hours Q1 earnings, pausing this week’s ascents.
“US mortgage applications are falling for a second week in a row as benchmark, 30-year, fixed mortgage rates continue to climb to their highest level in four months, close to the 7% mark.”
Meanwhile, in currency, sterling dropped back after striking a three-month high against the weak dollar on Tuesday.
The pound was 0.29% lower at 1.346 US dollars and was up 0.06% at 1.192 euro when London’s markets closed.
In company news, home improvement giant Kingfisher was lower at the end of trading despite a rise in sales.
The B&Q owner said the chain was boosted by rocketing demand for its garden and seasonal ranges in the UK due to warm weather, although trading challenges remained across its operations in France.
Kingfisher shares finished down 3.5% on Wednesday.
Elsewhere, Pets at Home was in the green as growth in its vet arm continued to boost revenues and profits.
It helped the UK’s largest pet retailer to offset a “subdued” market for pet products this year as conditions continue to “normalise” following a boom in puppy and kitten ownership during the Covid pandemic.
It saw shares move 1.6% higher by the close of play.
Magners and Tennent’s maker C&C Group moved 3.2% higher after progress in its turnaround plan helped drive a recovery in profits.
C&C reported a group operating profit of 45.8 million euros (£38.5 million) for the year to February 28, recovering from a 84.4 million euros (£70.9 million) loss a year earlier.
The price of oil moved a touch higher during the session amid heightened tensions in the Middle East.
A barrel of Brent crude oil was 1.8% higher at 63.71 dollars (£47.30) as markets were closing in London.
The biggest risers on the FTSE 100 were: Endeavour Mining, up 46p to 2,276p; Pershing Square, up 78p to 3,954p; Unite Group, up 15p to 835p; Hikma Pharmaceuticals, up 36p to 2,148p; and Polar Capital Technology Trust, up 5p to 331.5p.
The biggest fallers on the FTSE 100 were: Kingfisher, down 10.5p to 285.3p; Sainsbury’s, down 9p to 284p; Lloyds, down 1.86p to 76.62p; Anglo American, down 51p to 2,184.5p; and Melrose Industries, down 10p to 466.5p.
