* FTSE 100 down 0.1 pct at close
* GKN shares drop after rejecting Melrose final offer
* Pound pops on transition deal hopes
* Just Eat hit by DB downgrade(Recasts, adds quote and detail, updates prices at close)
By Helen Reid and Kit Rees
Early gains for the FTSE 100 quickly petered out and itended the session down 0.1 percent, missing out on a rally thatlifted European stocks, with
Falls in
A stronger pound weighed on big dollar-earnings stocks suchas consumer staples. Shares in Reckitt Benckiser andtobacco makers British American Tobacco and ImperialBrands fell between 0.4 percent and 1.9 percent.
Sterling rose on optimism that a Brexit transition dealmight be agreed next week, after a junior minister said
"Both the prospect and the timing of a transitional deal onBrexit remain highly uncertain. If such a deal does take place,however, it could be an important positive development forsterling in the near term by reducing "cliff-edge" risks,"strategists at UBS said in a note.
Merger and acquisition news also drove British equities,with GKN's shares reversing course after it rejectedMelrose's final
Takeaway company Just Eat was among the biggestfallers, ending 0.9 percent lower after Deutsche Bank cut itsrating to 'sell'.
"Just Eat is expanding into food takeaway delivery, analready crowded market, versus the company's existing positionas an order aggregation platform," Deutsche Bank analysts said.
Competition from rivals such as Deliveroo and UberEats wouldalso crimp its growth, Deutsche said.
Just Eat's shares are down 8 percent since its results lastweek, when it said it would invest in delivery in the
Overall the results season has been encouraging, said PeelHunt strategist Ian Williams.
"There have been a few profit warnings in theconsumer-facing areas, but 2017 reported numbers have come in abit better than expected and the growth number for 2017 has comeup a bit," he said.
The FTSE 100 remains cheaper than euro zone stocks onforward price-to-earnings, after February's sell-off sentvaluations across markets down.
"I don't think you can argue that valuation is going tobounce back to its previous level," added Williams.
(Reporting by Helen Reid and Kit Rees; editing by JohnStonestreet)
