London's blue-chip index ended its three-day winning streak after the financial sector's rally fizzled out.
By Ben Harrington Last Updated: 9:44PM GMT 17 Mar 2009
The FTSE 100 fell by as much as 70 points during Tuesday's session, but recovered in the afternoon following a strong start on Wall Street. The blue-chip index eventually closed down 6.89 points at 3857.1 while the FTSE 250 lost 58.52 points to 6211.79.
Tim Hughes, head of sales trading at IG Index, said: "After solid gains over the past week that have put around 400 points on the FTSE, many investors seem to be happy to start booking any profits at current levels and then see what the direction of the next major move might be."
WS Atkins topped the FTSE 250, rising 45½ to 514p, after it was added to Goldman Sachs' "buy" list. With few takeover deals announced in the London market this year, traders have been turning to the international mergers and acquisitions market to keep them excited.
One potential deal in focus is German fertiliser giant K+S's $2.4bn (£1.7bn) bid for US-listed Compass Minerals, the operator of Britain's largest and oldest rock salt mine at Winsford.
Sources said K+S has brought HSBC and Société Générale on board to provide about €500m (£463m) of financing for its possible takeover of Compass. The two banks could replace Morgan Stanley, K+S's adviser, in the debt financing syndicate, which currently comprises BNP Paribas and Dresdner Kleinwort.