The blue chip FTSE 100 index closed down 39.28 points, or 0.6 percent, at 6,781.51 points, slightly underperforming the broader European market. The index ended the month up 0.8 percent, and has risen 6 of the last 7 months.
The FTSE 100 is now 7 percent above its pre-Brexit level, helped by a fall in sterling. The FTSE 250 <.FTMC> has also recovered, up 2.3 percent since Britain's June 23 vote to leave the European Union.
"The market seems to be relatively buoyant and that's not really surprising given that interest rates are so low. There's not many other options in terms of where money is going to flow other than the stock market, given the historic low yields on bonds and cash not really producing very much," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
But commodity-related stocks came under pressure Wednesday.
Energy stocks were the biggest weight on the FTSE 100, trimming 15.8 points off the index. The sector extended falls after U.S. data revealed a large build in crude supplies.
Mining companies also slid as metals prices dropped. Randgold Resources (>> Randgold Resources Limited), Fresnillo (>> Fresnillo Plc), BHP Billiton (>> BHP Billiton plc), Anglo American (>> Anglo American plc) and Rio Tinto (>> Rio Tinto plc) dropped between 2.1 and 5 percent.
However, banking stocks Barclays (>> Barclays PLC) HSBC Holdings (>> HSBC Holdings plc) and Lloyds Banking Group (>> Lloyds Banking Group PLC) all rose 0.8 percent to 1.8 percent after a series of encouraging reports on the British economy, with the boss of Deutsche Bank also calling for more M&A within the sector.
The latest showed British consumer morale in August recovered somewhat from the slump that followed the Brexit vote. Another, from mortgage lender Nationwide, said house price rises picked up speed more than expected in August.
The house price data buoyed housebuilder Berkeley Group (>> Berkeley Group Holdings PLC), which was the top gainer with a 3 percent rise, despite worries that it could be relegated from the FTSE 100 in an upcoming reshuffle.
Outside the blue chips, Restaurant Group (>> Restaurant Group PLC) dropped 5.9 percent after Citigroup cut its rating on the stock to "sell".
"Restaurant Group’s share price has bounced over 50 percent of late. Given this significant move, and the view that the group faces ongoing operational headwinds, we once again downgrade the stock recommendation to Sell," Christopher J McVey, an analyst at Citigroup, said in a note.
(Editing by Mark Heinrich)
By Kit Rees
Stocks treated in this article : Lloyds Banking Group PLC
, BHP Billiton plc
, Berkeley Group Holdings PLC
, Anglo American plc
, Fresnillo Plc
, Barclays PLC
, Restaurant Group PLC
, Randgold Resources Limited
, Rio Tinto plc
, Royal Bank of Scotland Group plc
, HSBC Holdings plc