By Simon Kennedy, MarketWatch

LONDON (MarketWatch) -- The U.K.'s benchmark index held steady Monday as gains for oil giant BP PLC and deal news in the medical-devices industry were offset by losses for banking and mining stocks.

The FTSE 100 was virtually unmoved at 6,001.78 in early trading Monday.

Smiths Group PLC was the biggest gainer on the main index, jumping 10.5% after it said late Friday that it has rejected a 2.45 billion pound ($3.88 billion) offer for its Smiths Medical unit from buyout group Apax Partners.

The division supplies specialist medical devices and contributed nearly a third of the company's revenue in 2010.

Separately, shares in Smith & Nephew PLC were the second biggest gainer on the index, jumping 5.3% after the Sunday Times newspaper reported that Johnson & Johnson (JNJ) is considering a fresh takeover bid for the manufacturer of replacement knees and hips.

BP (BP) was also among the top performers, rising 1.9%, after the oil giant said late Friday that it has inked a share-swap deal with Russia's Rosneft, under which the two companies will also cooperate over drilling in the Arctic Ocean.

The two companies are cementing the agreement by handing each other close to $8 billion of their respective stock.

Goldman Sachs analyst Michele Della Vigna said in a note to clients that the deal will likely dilute BP's earnings by around 5%.

"We think that this is a unique opportunity for BP to gain access to a prospective new frontier area, where direct access as a non-Russian company would not have been possible," Goldman said.

Another heavyweight climber was Vodafone Group PLC (VOD), which gained 1.3% after a report in the Mail on Sunday newspaper that the company is close to selling its 44% stake in French mobile group SFR for around  £7 billion.

French group Vivendi , which owns the rest of SFR, will have the cash to buy the stake within weeks, the report said.

On the downside, most financial stocks were lower, with Barclays PLC (BCS) dropping 2.2% and Lloyds Banking Group (LYG) down 1.2%.

Fund manager Schroders PLC fell 2.7% after it was downgraded to neutral from buy at UBS on valuation grounds. And the London Stock Exchange was also hit by a broker downgrade, falling 2.2% after it was cut to sell from hold at Citigroup.

Mining stocks were also acting as a drag on the main index as most commodity prices retreated.

Shares in Xstrata PLC were the biggest faller, dropping 1.8%.