The FTSE 100 Index has slipped 19.7 points, or 0.4%, to 5618.60 in early trading with Hilton Group pacing the decline, retreating from yesterday's record high and Hilton Group dropping 1.1% to 364.75p after the company sold its lodging unit to Hilton Hotels Corp. of the US for $5.71bn.
The UK markets are scheduled to close at lunchtime today ahead of the New Year's holiday this weekend.
Marks & Spencer Group, Britain's largest clothing retailer, has also retreated 0.7% to 506.5p.
Japan's Nikkei 225 Stock Average completed its biggest annual rally in almost two decades as an economic recovery lured a record amount of overseas buying despite shares falling on the final trading day of the year. The Nikkei fell 1.4% to end the year at 16,111.43.
This year, overseas buying of Japanese equities topped 10 trillion ($85 billion) in a year for the first time ever, stock exchange figures showed yesterday. The previous record for foreign buying was 9.13 trillion yen in 1999.
A measure of 46 real estate stocks doubled in 2005. Tokyu Land, Japan's fourth-largest developer, almost tripled this year. Mitsubishi Estate, the nation's biggest developer by market value, doubled in 2005.
Exporters weren't left out of the rally. Technology companies and cart manufacturers rebounded in the last quarter of the year as a rally in the dollar against the yen inflated the value of their overseas earnings in local currency terms.
The dollar advanced 15% against the yen in 2005, with much of the rally coming in the last four months of the year. A weaker local currency bolstered the value of exporters' dollar- denominated sales.
Toyota ended the year up 47% and reached an all-time high this month. Toyota's annual operating profit gains about 25 billion yen for every 1-yen drop against the dollar said analysts.
Meanwhile, Sony rebounded from earlier losses to climb 29% in the fourth quarter as the yen weakened. The stock ended the year 22% higher.
In the US, stocks declined as Intel and other computer-related shares dropped. The Dow Jones Industrial Average was down 10.07, or 0.1%, at 10,786.19 at its close last night.
Intel, the world's largest semiconductor maker, retreated $0.36 to $25.08.IFAonline
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