By Tharuniyaa Lakshmi
London's FTSE 100 ended lower on Monday as losses in precious metal miners and drugmakers including AstraZeneca weighed, while easyJet topped the midcap index after agreeing to a takeover offer.
The blue-chip FTSE 100 index CURRENCYCOM:UK100 fell 0.3% to 10,651.8 points at close, while the midcap FTSE 250 FTSE:MCX slipped 0.2%.
Precious metal miners FTSE:NMX551030 fell 2.2% after gold prices retreated from a two-week high, as the dollar ticked up in anticipation of the U.S. Federal Reserve's latest policy meeting minutes due later this week.
Travel and leisure stocks (.FTNMX405010) rose 0.4%, led by easyJet LSE:EZJ, which gained 9.3% after the British budget airline agreed in principle to a sweetened takeover offer from U.S. investment firm Castlelake, valuing the carrier at up to 5.5 billion pounds ($7.34 billion).
"There's plenty of U.S. money but also Chinese money that looks at some of the assets," David Morrison, senior market analyst at Trade Nation, said. "It's a good opportunity to get invested or even to buy a chunk of UK companies."
Pharma and biotech (.FTNMX201030) fell 2.1%, with heavyweights AstraZeneca LSE:AZN and GSK LSE:GSK losing 2.5% and 1.6%, respectively.
On the geopolitical front, investors saw little progress in efforts to ease tensions in the , though uninterrupted shipping through the Strait of Hormuz and expectations of higher supply helped push oil prices lower.
The Bank of England could give Britain's government bond market a boost this week and lower public borrowing costs by more than 1 billion pounds ($1.3 billion) a year, banks say — but some former regulators warn a change in rules to achieve this would increase financial risks.
Among other stocks, Close Brothers LSE:CBG fell 9.1% after brokerage RBC downgraded its rating on the British lender to "sector perform" from "outperform".
U.S.-based Comcast's NASDAQ:CMCSA Sky agreed to buy the broadcast channels and streaming service of Britain's ITV LSE:ITV for £1.6 billion ($2.13 billion). ITV shares ended flat.