The FTSE100 was down 5.6 points at 5,686.5 with the FTSE250 lower at 9,194.9 and the FTSE Smallcaps down 11.1 points at 3,321.1.
Volume was weak with only 1.2 million shares changing hands in 191,279 deals.
Over on Wall Street, US stocks opened higher, with M&A activity providing support to a market nervously awaiting interest-rate direction on Thursday.
The DJIA was up 9.21 points at 10,998.30, the Nasdaq Composite climbed 4.99 points at 2,126.46, and the S&P500 gained 0.38 of a point at 1,244.88.
Today’s look at individual Stocks:
Marks & Spencer were one of the top FTSE100 risers today ahead of the Q1 trading update on July 11th, with SG Securities saying the retailer will exceed market expectations. It reiterated its buy recommendation and gave it a value of 660p. M&S shares rose 10p to 576.25p.
Miners provided the main support today, boosted by sector consolidation moves after US firm Phelps Dodge, and Canadian groups Inco and Falconbridge announced that they have agreed to combine in a $56 billion transaction to create a North American-based mining company.
Sector consolidation hopes gave us some gains in Corus today up 2p at 433 after European company Arcelor finally accepted a 40.4 euro per share takeover offer from Mittal Steel. Analysts now believe Corus might consider a merger with Russia's Severstal, which was pursued by Arcelor before Mittal came in with its knockout offer. The UK steel producer has also been linked with Everaz.
Other M&A news today was Shire up 13p at 768 on the back of a report in the Independent on Sunday that Switzerland's Serono was gearing up its 5.5 billion acquisition drive. In response, JP Morgan said it believes Shire is in a good position in any potential takeout discussion, although the company expressed more interest in acquisitions rather than being acquired.
On the downside today the utility sector remained under pressure after energy regulator Ofgem published initial proposals for the four main gas and electricity transmission networks in the UK. The proposals could double investment to £4 billion over the next five years but dealers cautioned the sum is less than the companies need. Ofgem is demanding real price cuts of 2.5% for National Grid, 15% for Scottish Power and 4% for Scottish & Southern Energy. Ofgem said it would block National Grid from including £358 million overspend on its gas transmission network in its regulatory asset value.
National Grid was therefore down 6p to 593, Scottish & Southern was down 14p at 1,115, Scottish Power was down 6p to 577, and International Power was down 1p at 274.
Persimmon was 9p lower at 1,201 after an in-line trading update from the house builder failed to inspire anyone. In response, Bridgewell Securities said the update is strong and confirms the housing market is operating at a satisfactory level and the integration of Westbury is going well.
Cadbury Schweppes was another loser, down 3p at 515 after news on Friday that it had to withdraw 1 million chocolate bars after finding traces of salmonella. According to the Sunday Telegraph, Cadbury failed to inform food watchdogs about the contamination at one of its factories, despite nine cases of the bacterium being identified over a four-month period.
