* FTSE 100 falls 0.2 percent, 5,900 holds
* Aggreko slumps on 2013 outlook uncertainty
* Vodafone drops on worries over 4G network costs
* Gains by miners provides underlying support
By Jon Hopkins
LONDON, Dec 17 Big falls by temporary power firm
Aggreko and market heavyweight Vodafone weighed on Britain's top
shares on Monday as the final full trading week of 2012 got off
to a lacklustre start.
Aggreko was the biggest percentage blue chip
faller, dropping 22 percent after the firm issued its second
profit warning in two months, saying there would be less need
next year for its generators.
"Aggreko shares now trade just above 52-week lows, crossing
beneath its 200-DMA (day moving average) without any major
support as investors remain bearish on the stock," Rik Thakrar,
risk manager and senior dealer at Spread Co. said.
"The dealing floor has noted a flurry of short selling
activity in the stock, with traders viewing current lower levels
as a consolidation point ahead of further falls throughout early
2013," Thakrar added.
Volume in Aggreko shares was the biggest on the blue chip
board at over nine times its 90-day daily average.
Overall FTSE 100 volume was relatively thin at about
three-quarters of the already low 90-day daily average as the
festive lull approached.
Volume was also strong in Vodafone, at 160 percent
of its daily average, as the mobile phone firm's stock shed 1.7
percent, accounting for over 5 points, or around half of the
FTSE 100 index's total decline.
Vodafone suffered after the Dutch state raised much more
than expected in its auction of fourth generation (4G)
frequencies, pointing to higher costs for operators.
"Friday's Dutch spectrum auction results took the market by
surprise with total proceeds 2.6 times higher than anticipated
and Tele2 bidding aggressively to secure all new entrant
spectrum," JPMorgan Cazenove said in a note.
"This will raise concerns around the Dutch mobile market
outlook, which we believe is negative for all operators."
Prices in the spectrum auction were so high that market
leader KPN said it would have to cut dividends to
afford its licences. KPN shares dropped 15
percent in Amsterdam.
In London, the FTSE 100 closed down 9.61 points or
0.2 percent at 5,912.15, albeit bouncing off session lows below
the psychologically important 5,900 late in the afternoon as
Wall Street put in a firm early performance.
U.S. blue chips were 0.7 percent higher by London's
close as investors eyed signs of movement in key budget talks.
Republican House Speaker John Boehner edged closer to
Democrat President Barack Obama's key demands in negotiations to
avert the "fiscal cliff" of tax hikes and spending cuts set to
take effect by Dec 31 unless Congress intervenes.
"U.S. lawmakers have this week left to dig in their heels
and flesh out a deal otherwise it is unlikely the FTSE 100 will
be sitting above that 5,900 level by the end of the year," Ishaq
Siddiqi, market strategist at ETX Capital said.
Strength in miners helped limit the blue chip
falls, adding over 8 points to the index, with the sector
supported by improving data from top metals consumer China,
following a year of underperformance which has seen the sector
fall 1.6 percent compared with the FTSE 100's 6.3 percent rise.
"Materials is the only cyclical sector to have
underperformed so far in 2012 and hence could be a key
beneficiary of the 'January' effect in 2013," they add,
reiterating a preference for mining, and pointing to a recent
trend where the worst performers of the prior year have
triumphed in January.
Airlines owner IAG was the top FTSE 100 gainer, up
3.3 percent in strong volume of 140 percent of its 90-day daily
average, after its Spanish unit Iberia said it had agreed to
negotiate with its unions over a five-year restructuring plan to
ensure the airline's future viability.
(Reporting by Jon Hopkins; Editing by Ruth Pitchford)