By Kit Rees and Sudip Kar-Gupta
LONDON (Reuters) - Britain's index of leading shares slipped on Wednesday from record highs reached in the previous session, partly reflecting currency moves which weighed on some of its global companies.
The blue-chip FTSE 100 equity index (FTSE), which hit a record high of 7,129.83 points on Tuesday, fell 0.7 percent to close at 7,024.01 points. The FTSE 250 mid-cap index (FTMC) fell 0.7 percent but also remained near record highs reached this month.
The dollar dipped while sterling rebounded a touch from this month's brutal sell-off as British Prime Minister Theresa May's offer to give lawmakers some scrutiny of the process behind Britain's plans to leave the European Union calmed market fears of a "hard Brexit". [GBP/] [FRX/]
That dollar weakness weighed on FTSE 100 companies which measure much of their revenues in dollar terms, such as pharmaceuticals group Shire (L:SHP) and engineering group Rolls Royce (L:RR), which both fell on Wednesday.
"I would not want to buy into the FTSE at these levels," said Horizon Stockbroking director Kyri Kangellaris.
Mining companies rose, however, with Glencore (L:GLEN), Anglo American (L:AAL) and Rio Tinto (L:RIO) all gaining between 0.9 to over 6 percent as the price of copper firmed on supportive inventory data. [MET/L]
The slump in sterling, which remains under pressure due to concerns over Brexit, has been a key factor for the UK stock market as Britain's most international firms stand to benefit from higher repatriated earnings and stronger exports.
The pound's drop has boosted many of the FTSE 100's international companies which earn much of their revenues in U.S. dollars, and therefore get a currency-related accounting lift as those dollars are converted back to pounds.
But it has also impacted the U.S. dollar value of the FTSE 100 -- a potential negative for international investors whose benchmark reference is the dollar, with the FTSE 100 down 6 percent so far in 2016 in U.S dollar terms.
A weaker pound can also hit consumer confidence, which often impacts small and medium-sized companies, although the FTSE 250 mid-cap index has been supported by corporate takeover activity and signs of economic resilience following the Brexit vote.
Shares in UK mid-cap housebuilder Telford Homes (L:TELF) advanced on Wednesday after it said it had not changed its growth targets since the June 23 referendum.
Fidelity International fund manager Kevin O'Nolan said he preferred the FTSE 100 to the FTSE 250 index.
"I have added a position favouring the FTSE 100 versus the 250. The 250 is more exposed to any slowdown in the domestic economy while the 100's global companies benefit from the weakness in sterling and improving commodity prices," he said.