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FTSE drifts as investors await LTRO loan figures

FTSE drifts as investors await LTRO loan figures

Britain’s FTSE gave a muted performance as investors awaited the results of more cheap loans for European banks.

The FTSE 100 slipped 0.02%, or one point, to 5,927 and the Mid-250 index slipped 0.21%, or 24 points, to 11,505.

Broadcaster ITV (ITV.L) topped the FTSE 100 to add 5.9p, or 7.3%, to 86.4p as it reported a 14% increase in profit before tax of £327 million in 2011. The figures beat forecasts, assuaging worries about reduced advertising revenues. See the FTSE’s performance and the index’s top winners and losers.

Investors await LTRO figures

The results of the European Central Bank (ECB)'s long term refinancing operation (LTRO) will show how much European banks requested to bolster their balance sheets.

Cheap loans will be given for three years to banks at a rate of 1% to improve cash flow in the European banking system and avoid a credit crunch.

The previous tranche of LTRO last December saw banks take up €498 billion in extra funding and is credited with contributing to the new-year market rally. The latest results of the LTRO are due to be announced at 10.00 GMT.

Other stock markets in Europe also made cautious gains: Germany’s DAX index added 0.67% to 6,933, France's CAC 40 index took on 0.62% to 3,475, and the FTSEurofirst 300 index of top European shares added 0.39% to 1,080.

European bond yields narrowed ahead of the results of the lending. The yield on Italian two-year bonds fell 16 basis points to 2.32%.

Stocks in Asia overnight put in a mixed performance: China’s Shanghai Index slipped 0.97% to 2,428, Japan’s Nikkei 225 took on 0.1% to 9,723, the Hong Kong’s Hang Seng Index pipped up 0.24% to 21,620.

Sterling added 0.16% against the dollar to $1.5927, and took on 0.19% against the euro to €1.1834.

International Airlines Group profits soar

International Airlines Group (IAG.L) jumped 6.2p, or 3.8%, to 769.4p as its operating profit soared 81% to £344 million in 2011. The increase in profit was driven by more passengers travelling in business class. However, fuel costs rose by 30%, or £1 billion during the year.

The group, which owns British Airways and Iberia, is planning to expand its base, and its takeover bid for indebted airline BMI is being examined by the European Competition Commission.

Citywire Top Stock Weir (WEIR.L) fell 40p, or 1.8%, to £21.65 as profits surged 34% in 2011. Pre-tax profits rose to £396 million in 2011, from £295 million the previous year, beating analyst forecasts.

The engineer, which produces gas and oil pumps, increased its profit guidance twice during the year and is on track to meet its 2012 targets. Its full-year dividend rose 22% to 33p.

Asia-focused bank Standard Chartered (STAN.L) took on 16.5p, or 1%, to £16.38 as pre-tax profits rose 11% to $6.8 billion in 2011.

Homebuilder Taylor Wimpey (TW.L) shed 2.8p, or 5.6%, to 49.7p as it returned to profitability in 2011, with profits before tax of £78.6 million.  

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