The London market lost its shine as euphoria over Vodafone's £84 billion US exit faded and worries over conflict in the Middle East returned to haunt traders.
Shares in the mobile phone giant slumped more than 5%, helping drag the FTSE 100 Index 37.8 points lower to 6468.4.
Investors locked in profits after a week of gains, following Vodafone confirming the sale of its 45% share in Verizon Wireless - which will net shareholders a £54bn cash and shares windfall.
While speculation over the sale had driven Vodafone's shares to their highest level since 2001, confirmation of the deal saw the stock lose some of its froth to stand 10.7p lower at 202.5p.
The top tier was subdued after its 1.5% improvement on Monday, with a decent session for mining companies failing to offset concerns about military intervention in Syria.
US president Barack Obama's call for strikes on Syria was given fresh impetus after he won the backing of US House Speaker John Boehner.
That helped ensure a sluggish start for the Dow Jones Industrial Average on Wall Street, while Germany's Dax and France's Cac 40 both closed in the red.
Property firms were among stocks under pressure, with Land Securities off 27.5p to 881p and British Land down 14.5p at 552.5p.
Hot on the heels of Vodafone's deal with Verizon Communications, Microsoft announced it is buying Nokia's line-up of smartphones and patents in a bid to capture a slice of the lucrative mobile computing market.
Investors in Nokia welcomed the deal, sending shares in the company up by as much as 40% in Helsinki.
Excitement in the technology and telecoms sector rubbed off on broadband company TalkTalk Telecom, which climbed 5.5p to 253.5p in FTSE 250 Index after JPMorgan Cazenove raised its price target to 300p from 225p.
But phone and broadband giant BT trod water after strong gains on Monday, with its shares edging 0.3p lower to 337.9p.
In corporate updates, shares in pub companies saw a mixed performance despite more signs that the sector benefited from strong trading this summer.
Punch Taverns reported an improving picture, with average net income returning to growth across its entire 4,000-strong leasehold estate. Shares were 0.5p higher at 12.75p.
But shares in Greene King, which has around 2,300 pubs, restaurants and hotels, faded 5.5p to 843p despite saying sales across its core retail estate rose 4.6% in the 18 weeks to September 1.
The biggest risers on the FTSE 100 were Tullow Oil 25p firmer to 1043p, Hargreaves Lansdown up 16p to 1031p, Associated British Foods 23p higher to 1901p and Randgold Resources, up 55p to 5120p.
The biggest fallers on the FTSE 100 were Vodafone, Land Securities, British Land and Pearson 21p lower to 1278p.
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