By Shristi Achar A and Medha Singh
(Reuters) -The UK's blue-chip FTSE 100 eased on Monday as investors digested recent gains on dovish pivots from major central banks, while Direct Line (LON:DLGD) slumped as Belgian insurer Ageas abandoned its buyout plans for the firm.
Direct Line shed about 11% after Ageas SA said it did not intend to make further offers for the British home and motor insurer following two failed attempts.
The stock logged its worst day in more than a year, helping to drag the FTSE mid-cap down 0.6%.
The FTSE 100 of top British firms dipped 0.2% to 7,917.57 points, led by losses in chemicals and automobiles and parts.
Last week, the FTSE 100 index notched its highest close in a year as investors cheered the Bank of England and the U.S. Federal Reserve signalling interest rate cuts this year. The UK benchmark index is headed towards its third quarterly gain.
"Global stocks are taking a breather after last week's central bank-led rally," said Art Hogan, chief market strategist at B. Riley Financial.
Focus will now shift to the U.S. core personal consumption expenditure price index, the Fed's preferred inflation measure, due on Friday, to further gauge the trajectory of inflation and interest rates.
Among bright spots were energy shares which rose 0.9% as crude prices climbed on supply concerns brought as hostilities intensified between Russia and Ukraine and in the Middle East. [O/R]
Elsewhere, Kingfisher (LON:KGF) ended 2.6% higher after sliding as much as nearly 5% during the session as the home improvement retailer warned profit would fall again this year.
Ferrexpo (LON:FXPO) jumped nearly 8% to the top of the FTMC mid-cap index after the miner said operations at Ukrainian unit Ferrexpo Poltava Mining (FPM) have been performing well.