The British engineer dropped 5.5% after it agreed to sell its Nortek Air Management business for about 2.62 billion pounds ($3.63 billion) and plans to use the proceeds to pay down debt, reduce a UK pension deficit and return cash to shareholders.

The blue-chip index closed 0.5% lower as the pound rose 1% to hit a one-month high against the dollar, while heavyweight energy shares ended 1.23% lower and were the top losers. [O/R]

"A pretty quiet trading day with a strong pound and weak oil stocks leading the blue chip index lower, but it doesn't really call for a sell-off headline as recovery optimism remains intact," said Keith Temperton, equity sales trader at Forte Securities.

With the FTSE 100 gaining 8.4% year-to-date and Britain's vaccine rollout continuing to progress, markets will have a chance to gauge the impact on the economy as employment data, retail sales, CPI, PPI, and flash April PMIs are all due this week.

The domestically focused mid-cap FTSE 250 index slipped 0.1% with oil and gas exploration company Energean being the top loser after its opertating loss widened.

Meanwhile, the number of people heading to shops across Britain jumped 87.8% last week as non-essential stores reopened after three months of COVID-19 lockdown, researcher Springboard said. Retail stocks ended flat.

The British outsourcer jumped 18.8% after U.S. private equity firm Siris Capital tabled a 624.3 million pounds ($864.59 million) bid in an all-cash deal. [nL4N2MC1KZ

Homebuilders dropped 0.4% even after property website Rightmove said advertised prices for homes in Britain hit a record high after finance minister Rishi Sunak stoked the market again by extending a tax-cut for home-buyers last month.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Alison Williams)

By Devik Jain and Shashank Nayar