The blue-chip FTSE 100 index <.FTSE> closed down 0.3 percent at 6,740.58 points. The FTSE's fall extended a pull-back since hitting a record high of 6,974.26 on March 2 and the index declined 2.5 percent over the course of the week.

"I am looking for further weakness in the very near-term although the market should eventually recover back to the highs. There is good support for the FTSE at the 6,700 and 6,650 point levels," said Thames Capital Markets' strategist Nav Banwait.

Utility stocks were among the worst performers after Britain's opposition Labour Party said it would ensure cheaper energy costs for consumers by the end of this year if it wins a national election on May 7.

SSE (>> SSE PLC) fell 2 percent and British Gas owner Centrica (>> Centrica PLC) weakened by 1.5 percent.

Both Centrica and SSE have been laggards since the start of the year on concerns that they will become subject to greater regulation and price caps, in one of the first signs of election-related stress in the markets.

Central Markets' trading analyst Joe Neighbour said he was "short" on the utility sector -- namely betting on future falls.

He added that new economic stimulus measures from the European Central Bank (ECB) were also pushing investors to sell utilities in order to take on more "risk" in their portfolio by acquiring bank stocks, which often outperform other sectors in a rising market.

Energy stocks such as BG (>> BG Group plc), Tullow Oil (>> Tullow Oil plc) and Royal Dutch Shell also fell as crude oil prices dropped, while a downgrade from Credit Suisse sent drinks group Diageo (>> Diageo plc) lower. [O/R]

Hotel and coffee shop operator Whitbread (>> Whitbread plc) rose to touch record highs after upgrades by Deutsche Bank and UBS. A similarly bullish note from Investec boosted aircraft parts supplier Meggitt's shares (>> Meggitt plc).

Outside the blue-chip index, the indebted oil producer Afren (>> Afren Plc) slumped 28.5 percent after a rescue plan was agreed that will lead to equity dilution.

The FTSE 100 remains up by around 3 percent since the start of 2015.

(Additional reporting by Alistair Smout; Editing by Gareth Jones and Andrew Heavens)

By Sudip Kar-Gupta