London’s top stocks inched into positive territory as an assortment of takeover stories helped offset sliding Asian markets and uncertainty about this week’s Bank of England interest rate decision.

Experian advanced after the Kohlberg Kravis Roberts made a bid for one of its US rivals, First Data Corp. The private equity firm agreed to pay $29 billion for the credit scoring agency, a 26 per cent premium over its value on Friday.

Sector consolidation news helped telecom stocks such as BT Group, which rose in reaction to news that AT&T and America Movil, the Mexican mobile phone operator, are in exclusive talks to buy a stake in Telecom Italia from Pirelli, its controlling shareholder.

Alliance Boots inched higher on word that Celesio, the owner of the Lloyd's Pharmacy chain, was weighing up options to challenge KKR's £10 billion offer. That was despite analysts questioning whether competition regulators would allow it to merge; Evolution Securities argued that Celesio seemed likely to want to scupper the bid and gain access to information on its main rival.

Outside the blue chips, Game Group benefited from Goldman Sachs adding the computer games retailer to its "conviction buy" list ahead of its annual results at the end of the month. A bullish statement from GameStop, a US peer, and the record European launch of Sony's PlayStation 3 mean current trading could be well ahead of market forecasts, it said.

On a more speculative tack, Rentokil Initial ticked higher on renewed gossip that the business services group could be a target for a buyout fund.

In Tokyo, the Nikkei closed down 259.24, or 1.5 per cent, at 17,028.41, reversing earlier gains, after the Bank of Japan’s tankan survey of corporate sentiment showed that the confidence index for the country's major manufacturers dropped for the first time in a year.

Hong Kong's Hang Seng ended the morning up 82.79 at 19,883.72, while South Korea's KOSPI index ended the day 0.5 per cent higher after the country's free trade deal with the US.

In China, the benchmark Shanghai Composite Index closed up 68.61 points, or 2.15 per cent, at 3,252.60.

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