By Shashwat Awasthi
(Reuters) - British shares fell on the year's penultimate trading day as investors consolidated gains from a rally that saw the blue-chip index enjoy its best run in three years and led midcaps to successive record highs.
The FTSE 100 (FTSE) shed 0.8% after logging 11 straight days of advances. The FTSE 250 (FTMC) gave up 0.6%, as dealers cleared the decks in another holiday-shortened week and braced for 2020.
Healthcare stocks AstraZeneca (L:AZN) and GlaxoSmithKline (L:GSK) were among the biggest drags on the blue-chip bourse. Oil majors Shell (L:RDSa) and BP (L:BP) also weighed, despite crude prices touching a three-month high.
"The overall picture is one of book squaring and profit-taking...with investors preferring to wait until next week before loading up on the first trades of a new decade," OANDA analyst Jeffrey Halley said.
Receding worries around the U.S.-China trade situation, British politics and Brexit have fuelled sharp gains for UK markets in December.
On Monday, trade hopes were further bolstered when White House trade adviser Peter Navarro said Washington and Beijing would likely sign a Phase 1 deal early next year.
At home, Prime Minister Boris Johnson's Dec. 12 election victory and prospects of a clear process towards leaving the European Union on Jan. 31 have spurred risk-on sentiment.
Though Johnson's hard line on a December 2020 deadline for a post-Brexit free trade agreement with the EU blemished an otherwise robust rally, the FTSE 100 is still tracking its best month since June and its biggest annual gain since 2016.
The more domestically focused midcaps are on course for their best month since January and their best yearly performance since 2013.
However, Halley warned against reading too much into year-end moves that have come in thin trading volumes over the Christmas holidays.
"Strong directional moves at this time of the year should always be taken with a grain of salt with so many participants, either away or having closed books for the year-end," he said.
UAE-based NMC Health (L:NMC) outperformed the FTSE 100 with a near 5% rise. The stock has lost over a quarter of its value this month after U.S. short-seller Muddy Waters criticised its financials.