The FTSE 100 index was flat on Monday with utilities leading the way but online gambling firms plummeting after the U.S. Congress passed legislation to ban online gaming there.
By 1043 GMT (11:43 a.m. British Time), the FTSE 100 was up 12.3 points, or 0.2 percent, at 5,973.1.
PartyGaming plunged 58 percent following a U.S. clampdown on the sector while smaller rival Sportingbet nose dived 58 percent and 888 tumbled 34.5 percent.
This U.S. legislation is a shock to everybody given that in the last eight years it never got through, an analyst said. If anybody had believed that there was much of a chance of it happening, the share prices would have been very different. These companies have 70 percent of their revenues from the U.S. and the impact will be strong today.
Sportingbet said it had scrapped a planned merger with World Gaming as a result of the legislation. 888 said the move would hit its results, but stressed it remained a profitable and viable business.
Meanwhile, Prudential, the second largest insurer in the country, fell 1.7 percent. The company, whose shares jumped on Friday on takeover talk, is examining its options for its UK operations, the Observer reported.
Water companies were amongst the strongest gainers in the FTSE 100, following news that mid cap water firm AWG said it had received new bid approaches after agreeing a 2.2 billion pound offer from Osprey, an investment group including Canadian, Australian and British firms.
Kelda Group gained 2.8 percent, while competitor Severn Trent gained 2.5 percent and United Utilities added 1.2 percent. AWG went up 4.9 percent.
This is a continuation of the theme we've seen for a long time. There's a huge demand for all of these companies, and a demand for both UK and European utilities on the back of mergers and acquisitions.
It's a follow on from the AWG deal and a general re rating of the sector, said another analyst, adding that AWG is trading at a high premium to its regulatory asset base, driving confidence in the sector.
Also in the utilities sector, the country's fifth biggest energy supplier, Scottish Power, gained 2 percent after it said that all its operations were performing well and that trading was expected to be ahead of expectations.
Trading for the current year is expected to be ahead of expectations as a result of good growth at PPM Energy and an improved performance from Energy Retail and Wholesale, it said in a trading statement.
Shares in mining company Anglo American were up 2.3 percent on speculation that fellow miner Rio Tinto is to make an offer for the firm, traders said.
Rio Tinto ticked up 1 percent. I think there was some bid speculation. The same old story of Rios looking at Anglos, a trader said. It's been rumoured so many times and gets banded around quite a lot.
Among the leading gainers in the FTSE 100, sugar and sweetener maker Tate & Lyle went up 2.8 percent after it said it had started its year strongly and in line with its expectations, adding profits in its first five months were comfortably ahead of its previous year.
BA BID TALK
British Airways shares rose over 1.4 percent following a newspaper report that two Middle Eastern groups considered bidding for the airline earlier this year. Dubai's Emirates, the focus of speculation in June around a possible bid for BA, said it still had no intention of bidding for the airline.
In the retail sector, shares in Tesco went up 1.6 percent following news that it will sell software from AIM listed Formjet under the Tesco Software brand.
Meanwhile, Next lost 0.1 percent after WestLB downgraded the retailer to reduce from hold.
Marks & Spencer dropped 1 percent after the brokerage raised its target but maintained its reduce rating. Leading the mid caps, property firm London Merchant Securities went up 12.3 percent after it said it was considering a potential merger with a third party but denied a media report that it may get a bid approach.