By Sara Sjolin, MarketWatch

Data confirm U.K. economy was top performer last year

LONDON (MarketWatch) -- Heavyweight oil producers slammed U.K. stocks lower on Tuesday, but the benchmark index was still on track for its best quarter since December 2013.

The FTSE 100 index dropped 0.9% to 6,832.59, erasing a 0.5% gain from Monday. The index was on track for a 4% quarterly gain, which would mark the biggest advance since a 4.4% rally logged in the last quarter of 2013.

For the month, the FTSE was eyeing a 1.7% decline, underperforming the other major European benchmarks. Fund managers and investment banks say they are cautious about buying into the U.K. stock market ahead of the May 7 general election. Read: Stocks to watch with U.K. election just weeks away (http://www.marketwatch.com/story/be-wary-of-these-uk-stocks-ahead-of-general-election-fund-managers-say-2015-03-30)

(http://www.marketwatch.com/story/be-wary-of-these-uk-stocks-ahead-of-general-election-fund-managers-say-2015-03-30)Oil blues: Oil companies added the most pressure on the FTSE 100 on Tuesday, tracking a more-than 2% decline in crude prices (http://www.marketwatch.com/storyno-meta-for-guid). Oil prices have been sliding in recent days, as investors wait for the outcome of the Iranian nuclear talks, which could pave the way for more Iranian crude flooding an already oversupplied global market.

Shares of Tullow Oil PLC fell 1.9%, BG Group PLC lost 1.4%, BP PLC (BP) gave up 1.4% and Royal Dutch Shell PLC (RDSB) dropped 1.1%.

Other stocks to watch: Tobacco firms were also among major decliners on Tuesday, due to what Tony Cross, market analyst at Trustnet Direct, described as waning consumer demand in China.

"And it's the aspirational or luxury brands that will be left most exposed," he said.

Shares of Imperial Tobacco Group PLC (ITYBY) dropped 2.5% and British American Tobacco PLC (BTI)fell 2.1%. Luxury-goods maker Burberry PLC (BURBY) erased 1.1%.

Shares of Meggitt PLC lost 3.2% after Exane BNP Paribas initiated coverage of the engineering company with an underperform rating.

Leading advancers, shares of Kingfisher PLC jumped 3% after the do-it-yourself retailer said it will close about 60 stores in its U.K. chain B&Q (http://www.marketwatch.com/story/kingfisher-net-profit-falls-will-close-stores-2015-03-31)and its "few loss-making stores" in Europe.

Pound climb: Sterling advanced against the euro (GBPEUR) and briefly erased its loss against the dollar (GBPUSD) after the Office for National Statistics said the U.K. economy expanded 0.6% in the fourth quarter, and not by 0.5% as previously estimated.

For the full year of 2014, the U.K. economy grew by 2.8% compared with 2013, 0.2 percentage points higher than what was previously reported. The data confirm that the U.K. was the top performing major Western nation (http://www.marketwatch.com/story/uk-top-performing-in-west-as-2014-gdp-revised-up-2015-03-31) last year.

The pound (GBPEUR) rose to EUR1.3777 from EUR1.3675 late Monday. Against the dollar, sterling(GBPUSD) traded as high as $1.4817, up from $1.4770 ahead of the GDP data and higher than Monday's $1.4813. It traded at $1.4782 at the latest.

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