Negative comments from US president Donald Trump on the progress of trade talks with China and the upcoming summit from North Korea have knocked the FTSE 100 from its high.
The UK blue-chip index fell 48 points, or 0.6%, to 7,826, down from its all-time closing high of 7,877 yesterday.
But the FTSE 100 was spared the heavier losses of European markets thanks to a fall in the pound, down 0.5% against the dollar at $1.337 as the Office for National Statistics reported consumer prices inflation of 2.4% in April, down from 2.5% in March.
A weaker pound tends to support the FTSE 100, whose stocks rely on overseas markets for around three-quarters of their earnings.
The German DAX 30 was down 1.5% while the French CAC 40 fell 1.3%.
Investors were knocked by comments from Trump that he was 'not satisfied' with the progress of trade talks with China and that ahead of next month's summit with North Korea, there was 'a very substantial chance it won't work out'.
The FTSE 100 was also weighed down by a fall in the price of Brent crude, 0.7% lower at $78.98 a barrel, on fears the Opec cartel of oil-producing nations could raise supply.
Marks and Spencer (MKS) jumped to the top of the FTSE 100, up 2% at 297.5p and having jumped as high as 309.6p at the open, as the embattled retailer held its dividend.
Annual profits fell 62% to £66.8 million, weighed down by a £321 million charge for store closures.
Excluding this charge, profits hit £580.9 million, ahead of analysts forecasts of £573 million.
'A sharp jump in Marks and Spencer's shares this morning means that the retailer got its news management right, by releasing the details of big store closures ahead of its results, but the numbers themselves are nothing to be proud of and show just how much work there is still to be done,' said Russ Mould, investment director at AJ Bell.
Standard Chartered (STAN) was also among the risers, up 1.3% at 777.1p, as the Financial Times reported Barclays (BARC) was considering a possible merger with the emerging markets-focused bank. Shares in Barclays fell a penny to 209.8p.