* FTSE 100 index falls 0.1 percent
* Commodity-related stocks take 5.9 points off the index
* U.S. markets shut, congressmen recess before cuts deadline
* Index set to retest 5-year highs despite short-term risks
By Alistair Smout
LONDON, Feb 18 Weak commodity prices meant
miners led Britain's top shares lower on Monday but the
benchmark FTSE 100 index remained set to test five-year highs
despite short-term caution among investors.
The mining sector weas the main drag on the
FTSE 100, losing 0.8 percent after copper fell to a
three-week low, with copper miner Antofagasta losing 3
percent, leading the index's fallers.
Last Friday, gold fell to a 6-month low, hitting miners such
as Fresnillo, which was down 1.2 percent in Monday's
"The miners have been underperformers, and with gold, silver
and copper coming off, that's not going to help the sector at
large," Zeg Choudhry, head of trading at Northland Capital
"But it's not particularly risk-off; underneath, the market
feels okay. The bias is still to the upside, but with the U.S.
closed today, we're drifting in the wind."
The FTSE 100 was down by 4.36 points, or 0.1 percent lower,
at 6,323.90 points at 1128 GMT, with the materials sector -
which includes commodity-related stocks such as miners - taking
5.9 points off the index, enough to take it into negative
The session was expected to be a quiet one with little
macroeconomic and corporate data and with the U.S. equity market
closed for the President's day holiday.
Lawmakers in the United states started a ten day holiday,
leaving four days for members of Congress to negotiate a deal to
avoid automatic budget cuts due to kick in at the beginning of
"With the Senate in recess this week there's really no time
left to come up with a compromise ahead of the March 1 deadline
for federal budget cuts," said Fawad Razaqzada, market
strategist at GFT Markets.
"That said, there's little universal conviction that 'the
end is nigh' for this rally with investor sentiment being
reported as strong even if there are some short-term concerns
Appetite for M&A, which comes with improved sentiment,
supported free-to-air broadcaster ITV, which topped the
list FTSE 100 risers.
It climbed 3.2 percent with traders citing the uplift in
recent M&A activity in the sector in general helping boost the
credentials of the perennially rumoured takeover target. Earlier
this month, Liberty Global struck a deal to buy
British cable TV company Virgin Media .
Despite resilient sentiment in the market, early 2008 highs
of 6,400 have proved a tough level for the FTSE 100 to breach
The index topped out at an intraday high of 6,384 on Feb.
13, but technical analysts said that the index could be priming
itself for another attack soon.
"The ability to hold the uptrending support line near
6294.00 suggests that the index is poised for another move to
the upside with 6400.00 the next likely target," James Hyerczyk,
analyst at Autochartist, said.
(Additional reporting by David Brett and Sudip
Kar-Gupta/editing by Chris Pizzey, London MPG Desk, +44 (0)207