Britain's leading shares shed 0.5 percent in early trade on Tuesday, giving back some of Monday's gains in tandem with losses overnight in Asia as investors paused for breath after markets hit fresh 10-month highs.
By 0752 GMT, the FTSE 100 index was 23.66 points lower at 4,872.57 after closing 45.34 points higher on Monday, snapping a five session winning streak.
"Having broken major resistance levels the markets are in a bit of no-man's-land, with the next major resistance levels unlikely to be breached in the next week," said Ian Horsley, indexes trader at Spreadex.
"The markets feel like they are due a pullback and clients that missed the rally are desperate for a significant drop to get onboard on the long side," Horsley added.
Miners and oils led the retreat, retracing some of Monday's gains as copper prices weakened, reflecting further uncertainty over recovery in China which saw Asian markets fall.
Xstrata was the top blue chip faller, down 4 percent, while Kazakhmys, Antofagasta, Eurasian Natural Resources, Rio Tinto, and BHP Billiton shed 1.9 to 3.3 percent as copper prices eased.
BHP Billiton, the world's biggest miner, said it will cut up to 70 jobs at its Mt Keith nickel mine in Australia to ensure the operation's viability, it said on Tuesday.
Oil majors were weak as crude prices eased below $74 a barrel, with BP, Royal Dutch Shell, BG Group, and Tullow Oil down 0.5 to 0.8 percent.
Cairn Energy dropped 2.1 percent as the oil explorer said its large Indian oilfields would begin producing oil this week but warned in its half-yearly report that meeting targets for the next stages of the development was becoming "increasingly challenging".
Banks fell back as well, with Lloyds Banking Group, Barclays , Royal Bank of Scotland, Standard Chartered, and HSBC off 0.3 to 1.8 percent.
The sale of Royal Bank of Scotland's retail and commercial assets in China has hit a stumbling block that could derail the talks with preferred bidder, Standard Chartered, the Financial Times reported.
Motor insurer Admiral Group was also a big blue chip faller, down 3.3 percent largely on profit-taking as it reported a better-than-forecast 5 percent increase in half-year profit, buoyed by a rise in car insurance premiums and steady growth in customer numbers.
VODAFONE POWER
Blue-chip heavyweight Vodafone was the top FTSE 100 riser, up 1.4 percent as JP Morgan upgraded its strategy stance on the European telecoms sector to "overweight", and advised exposure to the British mobile telecoms stock.
The broker said the telecoms sector is favoured by cheap valuations, increasing stable and predictable results and seasonal trading patterns that has led it to consistently outperform in the final months of most years since 1995.
Vodafone also benefitted from its perceived defensive attraction, a factor which accounted for the majority of other blue-chip gainers as investor's recent risk appetite faded.
Utilities Severn Trent, United Utilities, and Pennon Group stood out, up 0.6 to 1.2 percent.
Pharma was the top performing blue-chip sector, with GlaxoSmithKline, AstraZeneca, and Shire gaining 0.4 to 0.5 percent.
U.S. blue chips ended flat on Monday, having initially charged higher, with a sharp gain in U.S. Treasury debt prices triggering a sell-off in stocks.
A U.S. administration official said President Barack Obama would reappoint Ben Bernanke for the second term as Fed Chairman on Tuesday, a move which analysts said would remove some element of uncertainty from the market.
With no UK economic data due for release on Tuesday, investors will eye the S&P Case-Shiller U.S. home price index for June at 1300 GMT and the U.S consumer confidence report for August at 1400 GMT.
