FTSE 100: 7247.66 ▼ -47.04 (-0.64%)
Markets were calm as Sir Tim Barrow, the UK's permanent representative to the EU, formally presented Theresa May's Article 50 letter to Donald Tusk, president of the European Union.
The historic act triggering the start of the UK's two-year departure from the EU was greeted with equanimity on the stock market where the FTSE 100 drifted but gained 10 points to 7,353 in late afternoon trading.
On currency markets the pound dipped 0.15% to $1.2433 against the dollar but firmed against the euro which traded at 86.51p.
Bond markets meanwhile showed no signs of a flight to safety, with yields on high rated eurozone government bonds and UK gilts only edging higher.
Fund managers and stock brokers urged investors to keep calm.
Steven Andrew, a multi-asset manager at M&G Investments, said: 'The negotiations around the withdrawal of the UK from the European Union have the potential to be the most significant structural change to the UK's economy in a generation. Then again, the economic impact might be so small, we may not even notice.
'The degree of clarity around these issues is very likely to stay murky for some years yet, so rushing to judgement either way – from an investor's perspective – is not a good idea,' he said.
While political uncertainty is to the fore, Invesco Perpetual said investors should not be distracted by it.
'From an economic perspective, we expect a continuation of the eurozone recovery, underpinned by an accommodative monetary policy, less austerity, a more favourable FX [foreign exchange] rate and some structural reforms,' Invesco's European equities managers said.
'Europe has proven remarkably resistant to global macro-economic turbulence and its recovery, being largely driven by domestic demand, is hard to derail,' the team added in a statement.
Michelle McGrade, chief investment officer at TD Direct Investing, said: We stick to our message that investors should continue to focus on their long-term goals, stop being blinkered by politics and focus on the fundamentals – either by ignoring short-term performance wobbles or taking advantage of them by adding to their investments.'
3i (III) was the biggest blue-chip riser after Morgan Stanley upgraded the private equity giant to 'overweight' from 'equalweight', sending its shares 4.3% higher to 730.5p.
The bank's analysts said 3i's big stake in Dutch discount retailer Action could be worth more than 250p per share, which was not reflected in the price.
London Stock Exchange (LSE) was among the top risers on the FTSE 100, up 2.6% at £31.04, despite European Union antitrust regulators vetoing its planned merger with Deutsche Boerse (DG1Gn.DE), as investors anticipated a possible counter offer for the group.
Among 'mid cap' stocks, Stagecoach (SCG) was up 4.6% at 208.4p as the transport company reported higher rail revenues.
Game Digital (GMDG) was the biggest 'small cap' riser, jumping 12% to 44.5p as the computer games retailer's half-year results were less bad than feared.
Shares in Sepura (SEPU) plummeted, down 11.3% at 13.9p, as the UK government said it was minded to review the proposed takeover of the digital radio maker by Chinese group Hytera.