LONDON (Reuters) - The top shares closed flat on Monday as weakness from banks was offset by an aggressive rebound from mining stocks, helping the index break back through a support level which traders said could herald a buying spree.
The FTSE 100 .FTSE ended down 2.18 points at 5,923.69, well off the session low of 5,862.16.
“There’s a lot of support for the FTSE around the 5,900 level — in fact only breached once in 2011 when we had the Japan crisis in the middle of March,” Ed Woolfitt, head of trading at Galvan Research, said.
“We see it as a good level to be buying at ready for the run back up,” he said.
Miners .FTNMX1770 dominated the blue-chip leader board, bouncing back from recent lows as buyers came in for the sector which has hit by falling commodity prices.
Antofagasta (ANTO.L) was the standout FTSE 100 riser, up 3.8 percent after a Citigroup upgrade to “hold,” while Rio Tinto (RIO.L) and Xstrata XTA.L, which the broker named its preferred stocks, rose 1.9 and 2.1 percent respectively.
Kazakhmys (KAZ.L), meanwhile, climbed 2.4 percent after announcing plans to complete a secondary listing in Hong Kong by the end of June, a move that will boost its presence in China — the world’s biggest copper importer.
Banks .FTNMX8350 waned as euro zone finance ministers met to discuss a bailout package for Portugal and further steps Greece must take to hit deficit reduction targets, although investors were largely taking the meeting in their stride.
“To (an) extent I think a lot of institutions or anyone overseeing funds will already now have factored (it) in and actually be looking on for more relevant or more fresh catalysts,” Galvan’s Woolfitt said.
The meeting was overshadowed by the arrest of IMF chief Dominique Strauss-Kahn on sexual assault charges.
Elsewhere among the gainers, Autonomy AUTN.L rose 2.7 percent after the enterprise search software maker announced a further move into fast-growing cloud computing with a deal to buy assets from Iron Mountain’s (IRM.N) digital division.
On the downside, Centrica (CNA.L), down 1 percent, was among a number of defensive stocks heading south as JPMorgan advised investors against chasing defensives.
The broker remains “underweight” telecoms, utilities and pharmaceuticals on a 6-12 month horizon, but “overweight” technology, chemicals, autos, capital goods and financials.
“There are certainly some dark clouds in terms of the macro environment, potentially enough there to unnerve investors in the short term, whether it’s inflation, whether it’s a normalisation of interest rates or the European sovereign debt crisis,” Henk Potts, market strategist at Barclays Wealth, said.
“In saying that, the reporting season has been positive. Earnings estimates have been trending upwards across the board, and that should provide an element of stability,” he said.
Additional reporting by David Brett; Editing by