LONDON: Britain's top share index fell on Wednesday as a slowing U.S. economy and caution before a Federal Reserve policy meeting ends led some investors to take profits from recent highs.
The U.S. reported its economy grew in the first quarter at just a 0.2 percent annual rate, well below expectations for 1 percent growth and the fourth quarter's 2.2 percent growth.
"The disappointing GDP headline seems to be the pretext used by equity investors to take some profits," said Tristan Abet, cross-asset strategist at Louis Capital Markets. "The malaise is well known: equity indices have gone well ahead of the reality. A pull-back is simply a 'normal event'."
Investors also were waiting for a statement from the Fed, due after the UK market closes. The U.S. central bank has kept rates near zero since late 2008 to spur recovery from the financial crisis.
"Investors are cautious before the outcome of the Fed's policy meeting and will scrutinise the Fed statement for hints about the timing of the first rate hike in the United States," said Robert Parkes, equity strategist at HSBC Global Research.
The FTSE 100 index was down 0.9 percent at 6,971.32 points by 1411 GMT, still not far away from Monday's record high of 7,122.74.
The index has gained around 7 percent so far this year, but has underperformed regional peers such as Germany's DAX amid certainty about the result of a UK election on May 7.
Traders said the UK stock market was likely to stay choppy until the election, when a drop in British consumer confidence may work against Prime Minister David Cameron.
Among top sectoral decliners, the UK mining index fell 1.4 percent. Antofagasta dropped 2.6 percent after cutting its copper output forecast.
Barclays dropped 2.3 percent after setting aside another 800 million pounds ($1.2 billion) to cover potential settlements for foreign exchange manipulation.
Shares in British American Tobacco, the world's second-largest cigarette maker, fell about 1 percent after reporting a drop in revenue for the first quarter. It was hurt by the strength of the pound and a continued decline in the number of people who smoke.
Next, Britain's second-biggest clothing retailer, rose 2 percent as it maintained its profit forecast after posting first-quarter sales slightly ahead of its own guidance.
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