By Alistair Smout and Kit Rees
LONDON (Reuters) - UK shares gave up early gains but outperformed European peers on Thursday after the European Central Bank held rates steady and did not change its asset-buying programme.
The ECB kept the timetable for its quantitative easing programme unchanged and President Mario Draghi said that the possible extension of the programme had not been discussed, although bank committees had been ordered to consider options.
That sent stocks lower, and the euro higher against the dollar and sterling.
"Draghi's comments today will have disappointed those expecting the ECB to signal further extensions to its QE programme," said Alastair George, chief strategist at Edison Investment Research.
Britain's FTSE closed up 0.2 percent at 6,858.70, outperforming European shares thanks to sterling weakness, with British companies also less directly exposed to any disappointment from the ECB. The euro zone Euro STOXX 50 was down 0.3 percent.
Micro Focus was the top blue chip riser, surging 14.7 percent and touching a record high after it agreed to buy Hewlett Packard Enterprise's non-core software assets in a deal worth $8.8 billion.
Jasper Lawler, market analyst at CMC Markets, said the deal was a "good sign for the continued growth of U.K. business and technology post-Brexit."
Dixons Carphone (LON:DC), Britain's biggest consumer electricals and mobile phone retailer, was up 4 percent, touching its highest point since Britain voted to leave the European Union, after it beat forecasts with a 4 percent increase in quarterly sales.
"With trading ahead of expectations ... we remain confident that we could be upgrading as we move through the year. The shares are weak and remain undervalued and we advocate a strong Buy," analysts at Liberum said in a note.
Pearson, however, dropped 7.7 percent, hurt by share losses at its U.S. peer John Wiley whose first-quarter results disappointed the market.
It was joined by Standard Life (LON:SL) and Admiral Group (LON:ADML), which both fell after going ex-dividend.
Among the mid caps, travel group Thomas Cook Group gained 6.1 percent after launching a joint venture in China.
Also helping the stock, rival Dart Group said summer leisure travel bookings showed no signs of a slowdown.