UK firms more exposed to the domestic economy took a hit on Tuesday after reports that Prime Minister Boris Johnson will pass a law that could re-ignite fears of a hard Brexit, while Unilever slipped 5% after cutting its 2019 sales growth view.

Johnson is likely to block the extension of a Brexit transition deal with the European Union beyond 2020. That pushed the FTSE 100 0.2% lower, with banks such as Lloyds and housebuilders dragging the most.

The midcap FTSE 250, whose components generate most of their earnings at home, fared worse and gave up 0.8%. The index had hit successive all-time highs in the last two sessions after Johnson's election victory seemingly cleared a path for Brexit.

Shares of Boeing BA.N suppliers as well as those of airlines skidded after the U.S. company suspended production of its 737 MAX jetliner. Senior Plc fell 4%, while British Airways owner IAG dipped 2.6%.

(Reporting by Shashwat Awasthi in Bengaluru Editing by Saumyadeb Chakrabarty) ((Shashwat.Awasthi@thomsonreuters.com; within UK: +1 646 223 3403; outside UK: +91 80 61822606, +91 80 37962606;))