* FTSE down 0.3 percent, midcaps down 0.2 pct
* Exporters drag, oils provide support
* JPMorgan upgrades UK stocks to neutral
* IAG falls after outage, Ryanair jumps
By Danilo Masoni
MILAN, May 30 (Reuters) - British blue chips eased from record highs on Tuesday as sterling recouped some of last week's losses less than two weeks before a general election that will shape talks for the country's exit from the European Union.
The FTSE 100 was down 0.3 percent as it reopened after a long holiday weekend, while mid-caps were 0.2 percent lower.
The blue chip index hovered just below the record high hit on Friday after a run aided by a fall in the pound since Britain's vote in June last year to exit the EU.
Sterling's bounce on Tuesday weighed on dividend-paying exporters that most benefit from the currency's weakness.
"Investors have returned after a long weekend to fresh economic concerns for the euro zone - centred on problem countries Greece and Italy, continuing whispers of Russian collusion within the Trump administration, and the ever-tightening UK election race," said Henry Croft, a research analyst at Accendo Markets.
Polls taken since the opposition Labour Party and May's Conservatives released their election manifestos have shown Labour catching up, worrying investors and pushing the pound down almost 2 cents last week.
Sterling recovered some of those losses on Tuesday weighing on shares of heavyweights such as British American Tobacco , Shire and Imperial Brands - all of which make most of their revenues outside the UK. The three were the biggest drags on the FTSE 100 on the day.
Meanwhile, British Airways owner IAG ended the day down 1.4 percent, among the top fallers on the index despite some of its earlier losses through the afternoon session.
It was the first trading for the stock following massive weekend disruption to flights due to an IT outage.
"British Airways faces all kinds of questions in the wake of its IT failure and investors are rightly turning a bit cautious. It's estimated that the cost of the fiasco might be around 100 million euros, or around 5 percent of pre-tax profits this year," said ETX Capital Neil Wilson.
The contrast between full service airlines and their lower cost rivals was brought sharply into focus as Ryanair shares ended the day up 3.7 percent after reporting record annual profits. easyJet shares rose 1 percent.
Commodity stocks provided some support to the blue chip index with heavyweight oil major BP up 0.2 percent and miner Glencore rising 0.8 percent.
The FTSE is up around 5 percent this year compared to the 10 percent rise for euro zone stocks.
UK bluechips got a favourable vote from JPMorgan's recommendation that investors buy shares of large, dividend-paying exporters.
Strategists at the U.S. bank said it expected sterling's appreciation against the dollar to halt and UK stocks to claw back some of their underperformance against global peers.
"We think UK is becoming interesting in the regional allocation again," JPMorgan strategists said in a note, upgrading the country's stocks to neutral. (Reporting by Danilo Masoni; editing by Mark Heinrich)