A jump in the pound has knocked the FTSE 100, as retail sales rebounded following March's cold snap.
The pound rose half a cent against the dollar to $1.339, helping sterling claw back some losses after a sustained sell-off against the strong dollar over the last month.
Investors were buoyed by a better-than-expected 1.6% rise in retail sales in April, following weak figures for March when the cold snap hit shoppers.
The pound's rally weighed on the FTSE 100, which fell 44 points, or 0.6%, to 7,745, dashing hopes of a recovery from yesterday's 89-point fall.
A stronger pound tends to hinder the index as its stocks rely on overseas markets for around three-quarters of their earnings.
'This is a welcome bit of news for the UK economy following some disappointing data over the past few weeks,' said Ben Brettell, senior economist at Hargreaves Lansdown.
'But the underlying trend for retail sales is still pretty lacklustre, with longer-term growth slowing markedly.'
James Smith, economist at ING, said that other data for retail presented a mixed picture.
'Footfall fell again in April, while payments company Visa noted a further drop in spending. For this reason, we don't think the retail sector is out of the woods just yet,' he said.
'We think the fragile retail sector is the biggest risk to a summer Bank of England rate hike.'
On the FTSE 100, Mediclinic (MDCM) was the biggest faller, down 8% at 625.8p as the private hospital group fell to a loss following impairment charges to property in Switzerland and its investment in Spire Healthcare (SPI).
United Utilities (UU) dropped 1.8% to 790.8p, hit by a £7 millon penalty from regulator Ofwat. 'Regulatory headwinds mean United Utilities' pledge to build the dividend at or in line with inflation could come under threat in the years ahead, especially if returns don't improve,' said George Salmon, analyst at Hargreaves Lansdown.
On the FTSE 250, Electrocomponents (ECM) jumped 13.8% to 715.2p on better-than-expected results and the £88 million acquisition of materils procurement company IESA.
'While the acquisition is relatively modest, this foray into mergers and acquisitions after a long hiatus reflects management confidence in the group's prospects,' said Russ Mould, investment director at AJ Bell.
Tate & Lyle (TATE) was close behind, up 8.1% at 660.2p on a 23% jump in annual profits for the sweetener-maker. 'The first set of results for chief executive and former finance boss Nick Hampton are a good start,' said Lee Wild, head of equity strategy at Interactive Investor.
'Annual sales fell slightly, but a double-digit increase in adjusted profit is respectable, and there are plans to grow even faster.'
Ibstock (IBST) was among the fallers, down 5.6% at 275.4p as the brick and tile maker warned of a 'slower than expected' start to the year given the UK's extended winter.