Vodafone and AstraZeneca were lifted by takeover chatter on a quiet day for the FTSE 100 Index yesterday, which featured little in the way of major economic or corporate data.
The top-flight slipped 2.4 points lower to 6775.2 though there were more significant losses on Germany's Dax and France's Cac 40 following signs of increasing tension in Ukraine as a Russian aid convoy entered the country.
The crisis is seen as having a deeper impact on the prospects of the eurozone economies.
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In New York, the Dow Jones Industrial Average was slightly down at the close of the London market.
On currency markets, the pound held steady against the greenback, at just under 1.66 US dollars, and lifted slightly against the single currency, at just over 1.25 euros.
Mobile phone giant Vodafone rose 3.3p to 205.9p on reports that America's AT&T is preparing to pay more than £3 a share for the UK-based company.
The takeover chatter comes months after the US firm shot down speculation about an offer in January this year.
AT&T boss Randall Stephenson had previously said that he was excited by the "huge opportunity" to invest in mobile broadband in Europe.
The speculation was intensified at that time by the UK group's sale of its £84 billion sale of its stake in American venture Verizon Wireless.
Takeover talk has also boosted the share price of AstraZeneca, which climbed 3 per cent in the last session on rumours that US firm Pfizer could be mulling a new offer after a failed £69 billion proposal earlier this year.
Astra built on those gains to close up 6.5p at 4418p.
Meanwhile, bicycle and car parts retailer Halfords lost ground on the FTSE 250 after analysts at Barclays downgraded the group to an "underweight" rating. Shares fell more than 1 per cent, or 7.2p, to 488.5p.
The cut in outlook was the result of concerns over the impact of an interest rate rise on UK consumer spending in the retail sector, after it was disclosed that two members of the Bank of England's rate-setting committee voted for a 0.25 per cent hike this month. Barclays also downgraded its view of homeware group Dunelm Dunelm to equalweight, from overweight. Shares fell 10p to 893p.
Elsewhere, London Stock Exchange group rose after a 40 per cent rise in pre-tax profits to £83.6 million for the three months to the end of June, as it announced a £938 million rights issue.
It is raising the cash to help fund the acquisition of US compiler and asset manager Frank Russell Company. Shares lifted 24p to 2029p.
The biggest risers on the FTSE 100 Index were Royal Mail up 9.5p at 449.8p, Hargreaves Lansdown up 21p at 1154p and Vodafone up 3.3p at 205.9p. The biggest fallers were Fresnillo down 16.5p at 921.5p, CRH down 22p at 1379p and SSE down 23p at 1497p.