ARM leads fallers as FTSE drops away from record high

* Blue-chip FTSE 100 index falls 0.4 percent

* ARM hit as U.S. tech sector drops

* Barclays (LSE: BARC.L - news) falls after downgrade by Investec (LSE: INVP.L - news)

* TUI (LSE: TUI.L - news) gains on hopes of meeting growth target (Adds further detail, closing prices)

By Alistair Smout

LONDON, March 25 (Reuters) - Britain's leading share index gave up early gains on Wednesday, led down by a late drop in chip designer ARM and a fall in Barclays after a broker downgraded the stock.

ARM fell after the Wall Street open, dropping 6.1 percent by the close as the U.S. sector was hit by a downgrade to AMD and worries over growth after a stellar run.

ARM's fall was its biggest since January 2014. It licenses chip designs for the likes of Apple (NasdaqGS: AAPL - news) , and had gained over 50 percent since October before Wednesday's drop.

The blue-chip FTSE 100 index was down 28.71 points, or 0.41 percent, at 6,990.97 points by the close, having hit a record intra-day high of 7,065.08 on Tuesday.

The index has gained 6.5 percent so far this year and is up about 14 percent since the middle of December, helped by a strong recovery in the British economy and a bond-buying programme by the European Central Bank.

The index had rallied for six straight days before ending lower on Tuesday.

"I'm not surprised to see us pause at these levels, as after the strong run we've seen, the index has hit a region of resistance around 7,050," said Fawad Razaqzada, technical analyst at Gain Capital (NYSE: GCAP - news) , adding that the index should be supported by previous resistance around 6,900.

"Having made new highs so recently, however, the path of least resistance is clearly still to the upside."

Barclays was the biggest drag on the index, down 2.5 percent and trimming 4.2 points off the index after Investec downgraded its rating on the stock to "hold" from "buy".

However, the market was underpinned by gains in commodity stocks, which have been laggards so far this year to date. Oil & Gas firms added 8.8 points to the index as the price of Brent firmed.

The rise helped Britain's FTSE to outperform continental shares, with the Euro STOXX 50 down 1.1 percent.

"The FTSE is resilient in the face of European markets that are going nowhere. Commodity stocks are still playing catch-up, which helped the rally last week and is also supporting now," Chris Beauchamp, market analyst at IG (LSE: IGG.L - news) , said.

Travel firm TUI was the top FTSE 100 gainer, rising 2.6 percent after it said it was confident of meeting a target to lift full-year underlying operating profit by 10 to 15 percent, helped by rising holiday sales and prices.

"This is also a positive signal for the entire sector, which is getting some tailwind from lower fuel prices and relatively more money in the hands of consumers due to lower inflation," said Securequity sales trader Jawaid Afsar. (Additional reporting by Atul Prakash; Editing by Elaine Hardcastle/Ruth Pitchford)