London's exporter-heavy FTSE 100 opened lower on Wednesday, as the pound gained strength following a hotter-than-expected UK inflation reading, with rate sensitive real estate stocks leading declines.
By 0808 GMT, the blue-chip FTSE 100 index fell 0.3%, after gaining nearly 2% on Tuesday.
Investors are also awaiting the U.S. Federal Reserve's decision on monetary policy tightening later in the day.
The pound rose sharply against the dollar after British consumer price index (CPI) inflation unexpectedly rose to 10.4% in February.
Traders are now fully pricing in a 25 basis point interest rate hike by the Bank of England at its monetary policy meeting on Thursday.
The more domestically-focussed FTSE 250 midcap index also shed 0.4%.
The British Land Company fell 5.0% after Morgan Stanley reduced its price target on stock, taking the broader real estate index down 1.5%. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Rashmi Aich)