Attention could be focused on companies outside the FT-SE 100 index, which on Friday fell 84.6 points to 5,855.30, taking its drop last week to 0.7 per cent. That's as the wider FT-SE 250 and the FT-SE SmallCap index both advanced 3.7 per cent.
Gains last week were led by companies such as Blue Circle, the cement maker, which added 13.6 per cent as it sold a non-core unit, and Stakis, the hotels operator, which rose 38 per cent after it became subject to a takeover bid.
"FT-SE 100 valuations are looking a little stretched," said Michael Collins, manager at Henderson Investors. "I'm favouring companies that are most geared toward consumer spending."
Advances came as the Bank of England reduced interest rates by half a point on Thursday, giving consumers more disposable cash. Leisure and building companies, which are expected to be well placed to gain from higher spending, could also be subject to more approaches from rivals eager to snap up bargains.
Airtours, the package tour operator, could see earnings rise if Britons spend more on holidays. Until last week it had fallen 5.4 per cent this year. It took speculation of a takeover to send it 18.6 per cent higher. It and thebigger Thomson Travel Group, which rose 5 per cent last week, could advance more.
"If fund managers don't buy the companies [that have fallen] then some industrial's going to say, "If I pay a 35 per cent takeover premium I'm still going to get a bargain,' " said Jean-Marie Eveillard at SoGen International Fund in New York.
Lower rates are also expected to help shares in home builders as people borrow more to build or renovate houses and flats. Beazer Group led gains in the industry, rising 17.4 per cent last week. Until then it had fallen 6 per cent this year.
Within the UK's largest companies, those whose business is seen to be most linked to the fortunes of the economy may gain the most as investors shift from growth companies in the pharmaceuticals and telecommunications industry.
The FT-SE decline last week was led by Glaxo Wellcome, Vodafone Group and Zeneca.