By Francesco Canepa and Alistair Scrutton
LONDON (Reuters) - The FTSE pulled away from all-time highs on Tuesday, weighed down by a drop in drugs firm AstraZeneca and Asia-focused bank Standard Charted.
Weaker-than-expected UK economic output data helped the FTSE 100 edge off its early lows, however, as it knocked down the pound, making British blue chips' exports more attractive.
FTSE 100 companies generate around 75 percent of their sales abroad.
AstraZeneca was the top faller on the index, sliding 2.2 percent after U.S. rival Merck (NYSE:MRK) & Co's diabetes drug met heart-safety requirements in a recent study, giving it a leg-up on the UK group.
Asia-focused bank Standard Chartered (LONDON:STAN) fell 1.5 percent after saying profits in the first quarter of 2015 fell by over a fifth from a year ago as losses from bad loans jumped and trading conditions remained challenging.
The FTSE was down 57 points, or 0.8 percent, at 7,049.03 points by 1033 London time, having touched a new record high at 7,122.74 on Monday.
The index came off an intra-day low of 7,029.57 points as the pound fell on the back of data showing the UK economy slowed more sharply than expected the first three months of 2015.
"The logic of that...is that the top end of the market is helped by sterling being weak because of the high proportion of overseas earners," Ian Williams, a strategist at Peel Hunt, said.
The data was also seen as a setback for Prime Minister David Cameron, who has staked his campaign for re-election next week on the strength of the recovery.
Traders said the FTSE could struggle to make headway ahead of the closely contested British election on May 7. Sectors such as utilities and banks could come under regulatory pressure if the opposition Labour party takes office.
No party is expected to win an outright majority.
"As we get closer we're going to get a bit more volatility but people who hold equities for the long term shouldn't be distracted by short-term political risk because you just don't how that will play out," Williams said.
Centrica (LONDON:CNA), which has underperformed along with other domestic utilities this year on Labour's plans to cap bill rises, gained 2.1 percent after its chairman said it had made preparations in case it is approached with a takeover offer.
BP (LONDON:BP) rose 1.5 percent, contributing more than 5 points to the index, after it reported higher-than-expected profits thanks to a hefty increase in refining revenues that offset poor earnings from its oil production division.
"The extent of the beat does appear to have caught a lot of people by surprise," said Michael Hewson, chief market analyst at CMC Markets.