FTSE 100 drifts from two-month high

London stock brokers (file photo) Image copyright AFP

(Close): London's FTSE 100 drifted lower after Tuesday's two-month high, closing down 2.54 points at 7,041.42.

Shares in defence technology firm QinetiQ jumped more than 4% after it announced a deal to buy a targeting systems business from Meggitt for £57.5m. Meggitt fell 1%.

Crude oil prices pushed higher in early trading. North Sea Brent crude was 0.7% higher at $55.69 per barrel.

Oil shares were mixed, with BP trading 0.3% higher, but Shell down 0.4%.

"On Wednesday, UK stocks lost some ground with light profit taking headed into year-end," said Jasper Lawler, senior market analyst at London Capital Group.

"A finish for the year above 7,000 might just be the psychological boost required to presage a fresh record high in 2017," he added.

'Drab day'

Connor Campbell, financial analyst at SpreadEx, described the session as "another drab day of pre-Christmas trading".

"Hopefully tomorrow can bring with it something a bit more interesting. Investors may have to wait until the afternoon, however, when the final US third-quarter GDP figure is released," he said.

The pound was down 0.13% against the dollar at $1.2351. It was 0.45% lower against the euro at €1.1849.