Reports that Dixons Retail and Carphone Warehouse were on the verge of announcing a £3.7 billion merger sent shares in both groups higher.
Dixons added 1.71p at 49.71p and Carphone was 11.1p ahead at 335.5p as the “merger of equals” would create one of Britain’s biggest High Street chains.
But with Barclays disappointing on the results front, and the escalation of violence in the Ukraine over the long weekend, the FTSE 100 was on the back foot, ending the session 23.86 points lower at 6,798.56.
Barclays was the biggest faller in the top flight, down more than five per cent at 245p after its first quarter profits of £1.7 billion fell short of City expectations. Aberdeen Asset Management was also floundering after revealing that clients had been fleeing its emerging market funds in recent months. Its shares were down more than 2 per cent or 10.5p at 435.4p, amid negative broker comment regarding its acquisition of Swip.
Takeover target AstraZeneca laid out its defence against a potential hostile approach from Pfizer, painting a bullish picture of its new drug pipeline and forecasting sales of $45bn (£26.5bn) by 2023.
The British firm, which last week rebuffed a $106bn offer, made its case as an independent company with long-term financial targets which it said highlighted “the significant potential for shareholder value creation”. But with the odds on a deal lengthening, the shares slipped 130.5p to 4,677.5p.
Shares in Mothercare endured a choppy session as the retailer put out a statement confirming it was in discussions with its banks over its debts. The stock closed 6 per cent lower at 175.5p despite the firm reassuring investors that it expects to remain in compliance with the provisions and covenants of its facilities.