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FTSE steady as bank gains offset miners

Source: Reuters - Fri 13th Nov 2009

The top share index was little changed early on Friday, as strength in banks offset weaker miners with investors awaiting U.S. data, while British Airways rose after agreeing to a merger with Iberia.

By 9:14 a.m. the FTSE 100 was up 3.76 points at 1.9 points at 5,280.26 points, a day after closing at a three-week high.

The index is up 2.7 percent this week and has so far rebounded 53 percent since hitting a floor in March.

British Airways climbed 3 percent, following its announcement on Thursday of a preliminary agreement for a $7 billion (4.2 billion pound) merger with Spain's Iberia to create the world's third-largest airline by revenue.

"The main story is of course British Airways and Iberia. Focus is now on whether the synergies and cost cuts... can be sufficient to bring the strong growth that is needed to turn both businesses around" said Richard Griffiths, senior trader at Spreadex.

With no UK economic data due for release, investors' attention will be drawn to data from across the Atlantic, such as the September U.S. international trade figures at 1:30 a.m. and the University of Michigan consumer sentiment data for November at 2:55 a.m.

"Equity markets are... waiting on the figures coming out of the U.S. later and looking closely at whether the dollar can continue its strong run" Griffiths said.

Banks were higher, with Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered up 0.2 to 0.8 percent. 

Lloyds Banking Group has more than 700 million pounds of debts and investments tied up in UK-based real estate investor Kenmore Property Group, the Times newspaper reported.

Energy firms were broadly stronger, as crude prices edged up above $77 a barrel BG Group and BP added 1.1 and 0.2 percent respectively, while Royal Dutch Shell shed 0.8 percent.

Metals prices held steady as the dollar clung to its gains. Currencies were in focus as U.S. President Barack Obama kicks off his tour of Asia.

Miners extended losses from the previous session, with Kazakhmys, Antofagasta Eurasian Natural Resources and Xstrata off 0.9 to 1.7 percent.

Among individual stocks, the world's biggest drinks can maker Rexam, slipped 3.1 percent after the company said results in the second half of the year had been in line with expectations.

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