The UK’s FTSE 100 was down more than half a percent as shares eased gently into 2018’s first day of trading.
The index shed 0.52% – just over 39 points – to finish on 7648, a sluggish performance after its record close of 7687 during the final day of trading last year.
The fall was mainly due to consumer-based stocks – shares in Unilever, Diageo and British American Tobacco were all down.
Connor Campbell, financial analyst at Spreadex, said: “The FTSE will be hoping this is just a blip on its recent record high-hitting run, and not the creeping grip of concern as it heads into what could be a tricky season for updates from its key retailers.”
Earlier in the day, mining stocks were the main culprits, but Anglo American, Rio Tinto and Glencore all ended the session with gains of between 1.1% and 2.9%.
Markets in Frankfurt and Paris also lost ground, down 0.4% and 0.5% respectively, on a day of thin trading, with many investors still on holiday.
The euro and pound both rose against the US dollar.
The dollar was held back by fears that the Federal Reserve may not raise interest rates as quickly as expected in the coming months.
Greg McKenna, chief market strategist at AxiTrader, said the euro was strengthening as “traders are making the bet that the (European Central Bank) will simply follow the Fed in the year ahead and end quantitative easing and then move toward rate hikes”.
Figures were released on Tuesday showing solid manufacturing output and order growth in the UK last month but they were not enough to help the FTSE.
Russ Mould, analyst at online stockbroker AJ Bell, said: “Today is all about the latest PMI manufacturing surveys: China’s looked good and India is even better, while the UK posted a decent figure.”
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Wall Street opened more strongly and Asian stocks were also mostly positive, helped by higher company profits and hopes that US tax cuts will bring economic growth to the US and globally.
US jobs figures will be released at the end of the week.
Source: Sky News