By Kit Rees
LONDON (Reuters) - Britain's blue-chip equity index hit an all-time high on Tuesday while the mid-cap index outperformed European peers as sterling came under renewed pressure on currency markets, though a fall in commodity-related stocks weighed.
The FTSE 100 (FTSE) index closed 0.4 percent lower at 7,070.88 points, having hit a record high of 7,129.83 points earlier in the session.
The mid-cap FTSE 250 (FTMC) index closed 0.5 percent higher at 18,073.20 points, near its record intraday high of 18,607.13 points set earlier this month.
Sterling's plunge on fears of a "hard" Brexit has given a boost to international companies of the FTSE 100 which earn substantial U.S. dollar revenues and get a currency-related accounting lift as those dollars are converted to pounds.
"The concern will be that a reversal in fortunes for the currency could see the gains wiped off as quickly as they appeared," said Laith Khalaf, senior analyst at Hargeaves Lansdown. "That may well be the case, though it’s hard to see anything in the foreseeable future that’s going to propel the pound back to its former glory,"
Stocks exposed to South Africa, including Old Mutual (L:OML) and Mediclinic (L:MDCM) fell after South African finance minister Pravin Gordhan was ordered to appear in court over fraud charges, knocking the rand and weighing on the FTSE 100.
Commodity stocks were another drag, with mining firms Glencore (L:GLEN), BHP Billiton (L:BLT) and Rio Tinto (L:RIO) all falling between 1.9 percent to 2.7 percent on weaker metals and oil prices.
A surge by N Brown (L:BWNG) helped the FTSE 250 (FTMC) outperform the broader European market. The retailer jumped 16.5 percent after saying that it was on track to meet its full year expectations.
"Against the backdrop of a 'challenging' Spring-Summer 2016 for the entire UK apparel and footwear retailing sector, N Brown Group ... has delivered product sales ahead of the market and financial results ahead of expectations," Shore Capital Markets analyst Darren Shirley said.
The FTSE 250's companies are more exposed to the domestic UK economy, but that index has partly benefited from recent upbeat data that has led many forecasters to drop predictions that the British economy will slip into recession this year.
Some analysts also expect the drop in the pound to make British mid-cap companies cheaper and more attractive for potential overseas acquirers.