After falling as much as 1.8% in afternoon trade, the blue-chip index pared some of the losses and closed 0.9% lower, dragged down by pharmaceutical <.FTNMX4570>, bank <.FTNMX8350> and mining <.FTNMX1770> stocks.

The domestically focused mid-cap FTSE 250 index, considered a barometer for Brexit sentiment, ended 0.5% lower, after British Prime Minister Boris Johnson warned his top ministers that a EU deal was far from certain but that Britain would thrive with or without a deal.

"No deal at this moment would be a bitter blow for UK businesses and consumers and it's inconceivable that the UK leaves on these terms, let alone in the midst of a pandemic," said Craig Erlam, senior market analyst at OANDA Europe.

UK markets have sharply rebounded this month from a 5% fall in October, aided by a slew of stimulus measures and as positive COVID-19 vaccine data spurred hopes of sooner-than expected economic recovery.

"There has to be some caution here," said Greg Swenson, founding partner of Brigg Macadam, a London-based investment bank.

"This isn't one of those flip the switch - the vaccine has arrived and everybody start buying. There will be some bumps in the road... but surely the long-term prospects are exceptional."

In company news, Asset manager Intermediate Capital Group surged 7.9% after posting a higher first-half profit, while Imperial Brands Plc jumped 7.3% after forecasting better profits for 2021.

Home repair services provider HomeServe Plc added 2.4% after it posted a stronger first-half profit and raised its dividend.

EasyJet Plc fell 1.9% after it plunged to an annual loss of 1.27 billion pounds, while Upper Crust owner SSP Group tumbled 6.2% after Morgan Stanley downgraded the stock to "equal-weight".

(Reporting by Devik Jain in Bengaluru; Editing by Bernard Orr, Uttaresh. V and Nick Macfie)

By Devik Jain