The latest round of takeover interest in London failed to inspire the market yesterday as it slipped just off Monday's high.

A string of retailers surged up the blue chip risers board after mid-cap stock Kesa was targeted by private equity suitors.

But with financial stocks going backwards, the FTSE 100 Index failed to maintain the earlier gains which saw it get within 22 points of the 6,000 mark, leaving it to close the day 2.2 points down at 5950.6.

Comet owner Kesa grabbed much of the attention after it revealed it had rejected an approach worth £1.72bn from a private equity firm.

Shares in the European operator jumped almost 11 per cent in the second-tier of the market - up 32p at 325p - as investors were faced with further bid speculation following yesterday's developments involving heavyweights Vodafone, BAA, the London Stock Exchange and Mitchells and Butlers.

The chief top-flight beneficiary of the Kesa announcement was Kingfisher, which ticked six per cent higher, or 14.25p, to 253.25p, amid hopes of further consolidation in the retail sector.

Dixons owner DSG International was also on the move, up 10.25p to 187.25p, while Marks & Spencer cheered 16p to 570p and Argos owner GUS gained 18p to 1077.5p.

In the FTSE 250 Index, WH Smith was up 21.5p to 995p.

But the biggest gains of the session came from oil exploration company Cairn Energy after it produced a solid set of full-year figures and upgraded its reserves estimate for key fields in Rajasthan.

Shares were up seven per cent, or 126p, to 2063p, as the company also said it was considering a part-flotation of its Indian business.

Financial stocks went in the other direction and weighed heavily on the market, with bank HBOS down 12.5p to 1000.5p and insurer Royal & Sun Alliance 1.5p lower at 134.5p.

London Stock Exchange took centre stage on Monday with a 30 per cent rise in its share price after New York-based exchange Nasdaq became involved in the long-running battle surrounding the LSE.

With analysts expecting other offers, the stock shook off a subdued start to add another 41p to reach 1190p.

Pub chain Mitchells and Butlers gave up some of its strength after learning it was in the sights of property tycoon Robert Tchenguiz. Shares rose 19 per cent last night but were off 10p to 480p, a drop of two per cent.

Elsewhere in the FTSE 250 Index, industrials group Cookson picked up 36.5p to 525p, a gain of seven per cent, after it posted improved profits for 2005 and spoke optimistically about prospects for this year.

Woolworths managed a more modest gain of three per cent, even though it said its wholesale distribution arm EUK had lost a contract to supply Tesco with DVDs and music. Analysts said the news was no shock after a warning in January and shares lifted a penny to 36.25p on the back of news about Kesa.

Other blue chip risers included DSG, up 10.25p to 187.25p and Hanson, up 24p to 741p.

The heaviest fallers were PartyGaming, off 2.25p to 127.5p, WPP, down 11p to 683.5p, International Power, 4p lower to 274p and Amvescap, down 7.5p to 528p