(Reuters) - UK shares closed in the red on Wednesday, ending a six-day winning streak, as international heavyweights were pressured by a stronger pound and Ocado slumped after a fire at its flagship distribution centre.
The FTSE 100 edged 0.1 percent lower, while the more domestically-focused FTSE 250, which benefits from a strong pound, was up 0.4 percent.
Sterling held steady after strong comments on Brexit from European Council President Donald Tusk and as investors mulled a report that UK cabinet ministers had discussed plans that would potentially postpone Britain’s exit from the bloc to May 24.
The gains in sterling were enough to drag blue-chip exporter stocks such as Diageo, British American Tobacco and Reckitt Benckiser lower.
Online retailer Ocado shed 6.3 percent after it said a fire at its automated distribution centre in Andover could hit sales growth.
Earlier, U.S. President Donald Trump offered little sign of progress in trade talks with China and vowed to build a U.S.-Mexico border wall in his State of the Union address, stoking fears of another U.S. government shutdown and keeping markets subdued.
However, London Capital Group analyst Jasper Lawler said there was nothing “too shocking to cause any kind of risk aversion in the address”.
“What we are seeing is just a little bit of weakness giving back some of those gains... more like profit-taking than any new contributing factor.”
BP, which had led the main index higher with a more than 5 percent gain on Tuesday after strong results, advanced 1.4 percent as oil majors reversed course to gain on the day, despite lower crude prices.
GlaxoSmithKline rose 1.6 percent as strong sales of its new shingles vaccine boosted fourth-quarter results and it forecast 2019 profit to decline less than the market view.
Britain’s biggest housebuilder Barratt rose 3 percent after it posted higher first-half volumes and, in relation to Brexit, said it was working with suppliers to ensure continuity of supply of overseas components.
Irish building materials group CRH gained 2 percent after a Reuters report that activist investor Cevian Capital had built a stake in the group.
Midcap lender CYBG, a newly emerged challenger to Britain’s big retail banks, surged 14 percent on its best day ever after reporting a rise in first quarter lending.
Markets are awaiting the Bank of England (BoE) meeting on Thursday where Governor Mark Carney and his fellow interest rate-setters are expected to keep borrowing costs on hold.
“What you want to see is an acknowledgement from the BoE that actually wage pressures are growing, inflation is at or above target, and so if and when Brexit uncertainty diminishes or disappears then they are ready to start tightening policy,” Lawler said.
Small-cap support services provider Interserve ended 1.8 percent lower after a choppy trading session that saw it surge 10 percent after striking a deal with creditors to more than halve its debt by issuing new shares.
(Graphic: Ocado vs FTSE 100 link: tmsnrt.rs/2UMgBIC).
Reporting by Shashwat Awasthi and Muvija M in Bengaluru; Editing by Andrew Heavens and Toby Chopra