Britain's top shares fell slightly early on Wednesday as gains from commodity stocks, supported by firm raw material prices, were outweighed by falls from banks, while retailers suffered from high street gloom.
In early-day trading, the FTSE 100 was 7.62 points, or 0.1% lower at 6,048.81 after it rose for a third day to close at its highest since May 2008 on Tuesday.
Gloom on the British high street weighed on the index with Europe's number three electricals retailer, FTSE 250 listed Kesa , falling 6.5% warning that adjusted pretax profit was likely to come in at the lower end of expectations.
Smallcap HMV tumbled more than 9% after press reports that the music and entertainment retailer had been denied credit insurance for additional sales.
The negative news pressured clothing retailer Next which fell 0.9%.
Morrison Supermarkets was also among the sharpest fallers, down 2%, with traders citing the impact of a downgrade from Morgan Stanley to "underweight" from "equal-weight".
Banks were also weaker, retreating after strong gains the previous session. Barclays fell 1.4%.
The sharpest faller was Imperial Tobacco, which fell 3% after going ex-dividend.
Publisher Pearson was the top gainer, rising 5% after it raised its profit forecast for the second time in three months.
MINES SUPPORT
Miners and energy stocks provided the bulk of the support for UK blue-chips with metal and crude prices bolstered by weakness in the dollar and some strong U.S. corporate news.
Fresnillo added 0.6% while BP was up 0.8%.
After the New York closing bell, Apple reported better-than-expected fourth-quarter revenue, fuelled by blockbuster holiday sales of the iPhone and iPad, sending its shares up over 4%.
Fellow U.S. tech giant IBM also reported a stronger-than-expected quarterly profit after-hours.
"There's no reason to change, equities are the only game in town, consumer spending is on the march as shown by strong numbers from Apple and IBM," said David Buik, senior partner at BGC Partners.
U.S. corporate earnings in focus on Wednesday will be particularly from the financial sector, with Goldman Sachs, Bank of New York Mellon, State Street, and Wells Fargo all due to report numbers ahead of the New York open.
On the macro front, UK unemployment numbers will be released Wednesday, with claimant count unemployment rating seen rising by 1,500 after a 1,200 decline in November.
November's ILO unemployment rate is seen steady at 7.9%.
Across the Atlantic, December U.S. housing starts and building permit numbers will be a focus at noon, with the weekly mortgage and refinancing indexes also due for release.
The technical outlook is bullish for the UK blue chip index.
"The FTSE broke out to the upside on the 240-minute chart, signaling a possible rally to 6,112.84 to 6,191.31," said James A. Hyerczyk, analyst at Autochartist.
"Although a breakout rally is currently taking place, the key price which has yet to be breached is the high for the year at 6,090.49. Once this level is penetrated, upside momentum will be necessary to keep the rally intact and on course for the test of the target zone," Hyerczyk said.
