By Danilo Masoni and Kit Rees
MILAN (Reuters) - Britain's top stock index steadied on Tuesday as Tesco (L:TSCO) rallied after it won approval for a takeover and Vodafone (L:VOD) reported strong results, outweighing weakness among mining companies.
The FTSE 100 (FTSE) ended the session flat in percentage terms at 7,414.42.6 points, following three straight days of declines. The mid-cap index (FTMC) gained 0.3 percent.
Tesco was the top riser, jumping 6.2 percent after the British competition regulator gave provisional approval for its proposed 3.7 billion-pound takeover of wholesaler Booker (L:BOK), moving Britain's biggest retailer closer to securing a new avenue of growth. Booker rose 6.8 percent.
"This is a positive catalyst for the Tesco share price as it reduces the uncertainty over this deal," Bernstein analyst Bruno Monteyne said.
"However, we expect some uncertainty to remain as the focus will now shift to: will investors approve the deal?"
Also in the food retail space, Sainsbury's (L:SBRY) rose 0.7 percent after data showed that Britain's second-biggest grocer after Tesco posted the strongest rise in grocery sales in the last 12 weeks.
Vodafone was another strong performer, rallying more than 5 percent after raising its forecast for full-year earnings growth to around 10 percent from 4 to 8 percent, based on a strong first half.
However, drops among mining stocks weighed on the broader market. Shares in Rio Tinto (L:RIO), Anglo American (L:AAL), Antofagasta (L:ANTO) and Glencore (L:GLEN) declined 2.5 percent to nearly 3 percent as the underlying price of copper fell. [MET/L]
ITV (L:ITV) was another faller, down 2.6 percent after posting a 1 percent decline in third-quarter sales.
Outside of the FTSE, mid-cap asset manager Intermediate Capital (L:ICP) soared 8.2 percent after reporting record inflows.
On the macroeconomic front, investors were also focusing on October consumer inflation data, which unexpectedly held steady.
The data sent sterling close to a three-week low against the euro as it raised new questions over the Bank of England's interest rate action. The currency recovered, however, later in the session.
"This probably isn’t the peak in UK inflation," Aberdeen Standard Investments' senior economist Paul Diggle said in a note.
"Given that consumption has been the bedrock of the UK economy since the referendum, that doesn’t bode particularly well for growth," Diggle added.