* FTSE 100 down 0.5 pct at close
* Sterling hits 3-mth high
* Dollar-earners weigh
* MiFID launch eyed (Recasts, adds quote, detail and graphic; updates prices at close)
LONDON, Jan 2 (Reuters) - Britain's top share index fell back from a record high on Tuesday, with dollar-earning exporters hit hardest as sterling rose.
Britain's FTSE index ended the session 0.5 percent lower at 7,648.10 points, slightly underperforming European peers on the first trading day of the year after a record-setting 2017.
Small caps, more focused on the domestic economy and therefore less vulnerable to a stronger pound, declined just 0.2 percent, as did mid caps.
Consumer staples took the most points off the FTSE, just over 19 points, as shares in British American Tobacco, Diageo and Unilever, declined. They all source a significant portion of revenues from overseas.
"The FTSE will be hoping this is just a blip on its recent record high-hitting run, and not the creeping grip of concern as it heads into what could be a tricky season for updates from its key retailers," Connor Campbell, financial analyst at Spreadex, said in a note.
Volumes were also muted following the end of the holiday season, while the forthcoming launch of a major reform of European Union financial markets on Wednesday also kept trading cautious.
Though miners weighed earlier in the session, they reversed losses with Anglo American, Rio Tinto and Glencore all ending the session with gains of between 1.1 percent and 2.9 percent.
The sector rallied into the end of 2017, spurred by buoyant metals prices.
However energy group BP was down 1 percent after it said it expected a positive impact on future post-tax earnings from the U.S. tax overhaul, but also a one-off non-cash charge of about $1.5 billion on fourth-quarter results.
"Whilst there is always the chance that the necessary hit turns out to be more, you would imagine the company has been conservative, meaning more likelihood that it in fact turns out to be less," said Mike van Dulken, head of research at Accendo Markets.
Royal Dutch Shell Plc, which said last week it would also take a one-off hit but benefit over the long term from the overhaul, was also 0.2 percent lower.
Compass Group fell 1.3 percent after world's biggest catering firm's outgoing CEO died in a plane crash on New Year's Eve.
In the airline industry, British Airways owner IAG added 2.7 percent after it agreed to buy Niki, Air Berlin's insolvent Austrian holiday airline, for 20 million euros.
(Reporting by Julien Ponthus and Kit Rees; Editing by Peter Graff)