* FTSE 100 down 8.77 points at 6,491.22
* Miners fall, Glencore down ahead results
* Shire rises on M&A talk
By David Brett
LONDON, Aug 19 Britain's top shares were largely
unmoved early on Monday, with the market continuing to drift as
it awaits the impact of possible stimulus withdrawal in the
A light economic calendar and strong short-term technical
support also did little to help the market breakout of its
The UK's FTSE 100 was down 8.77 points at 6,491.22
0721 GMT. The index has been locked in a 250-point range since
the start of July.
In the short-term analysts said support would be found at
the 50-day moving average, around 6,450 and below that on the
way down around 6,400, previously resistance, followed by the
200-day moving average, currently at 6,295.
Traders said there is unlikely to be too sharp a move either
way until September's meeting of the Federal Reserve.
"The latest unemployment numbers and strength from the U.S.
economy is fuelling speculation that Federal Reserve stimulus
measures will be tapered as soon as next month," Mark Ward, head
of trading at Sanlam Securities.
"As traders begin to return from their summer holidays,
September could prove to be interesting if investors dip their
toes in to take advantage of the recent weakness," he said.
Yields across government bonds globally have been rising
ahead of the expected wind down in stimulus in the United States
with UK gilt yields at 2-year highs.
Despite rising yields eroding some of the attractiveness of
stocks Mislav Matejka, strategist at JP Morgan, said potential
further increases in yields can be tolerated by equities.
"Higher bond yields are helping to broaden the market
leadership and are facilitating an asset allocation shift away
from fixed income," he said in a note.
Industrial metals up 25 percent, miners
rising 7.7 percent and forest and paper
climbing 5.7 percent have all been the market
leaders over the last month, with the likes of higher yielding
telecom sectors among the laggards.
"We think the valuation cushion is still substantial,"
Miners were the main drag on the FTSE 100 as
traders banked profits on a sector which has been a big
outperformer over the last 30 days.
Miner Glencore Xstrata fell 1.5 percent ahead of
first-half earnings due out on Tuesday in which it is expected
to write down the value of assets inherited from Xstrata by as
much as $7 billion.
Top gainer on the FTSE 100 on early on Monday was drug firm
Shire, which climbed 3 percent on a report in Sunday
Times that the company has hired Lazard to beef up its team of
advisers as foreign predators prepare to pounce, traders said.
M&A was a big feature among the mid caps too as
British engineer Kentz leapt 25 percent after rejecting
takeover approaches from larger London-listed rival AMEC
and German group M+W Group, saying both undervalued the
(Reporting by David Brett; Editing by Toby Chopra)