London shares hold firm

London shares held firm in relatively quiet trade on Wednesday as Standard Chartered rebounded from heavy losses to help keep the index in positive territory.

Market sentiment was fairly subdued however as traders looked ahead to the release of Chinese data on Thursday, including inflation and industrial production.

London's benchmark FTSE 100 index of top companies managed to add a slight 0.08 percent to 5,845.92 points despite the Bank of England lowering its forecast for growth this year to near to zero.

Back in London, "the reality is that the problems in Europe haven't gone away -- ING (bank) has taken a big hit on Spanish exposure in today's results -- so unless we see more really decent fundamentals coming out of the US and Asia, then it's going to be hugely difficult to justify much more on the upside," GFT Markets analyst Fawad Razaqzada said.

Dutch banking giant ING said its second quarter net profit slumped 22.3 percent year-on-year to 1.17 billion euros, as it took a large hit on its exposure to debt-plagued Spain.

ING booked a loss of 178 million euros on the sale of risk assets, mainly its holdings of Spanish government bonds.

In reaction, ING's share price slid 1.27 percent to 5.68 euros on the Amsterdam stock market, which was 0.68 percent lower.

In London, Standard Chartered was the star performer as shares in the Asia-focused bank recouped some of the previous day's losses after New York state regulators accused it of hiding $250 billion in transactions with Iranian banks.

The lender has vehemently denied the allegations and its shares rallied 7.08 percent to 1,315.5 pence, having slumped by almost 17 percent on Tuesday.

Rio Tinto shares rose 2.86 percent to 3,200 pence after the miner revealed that underlying earnings slipped 34 percent to US$5.2 billion in the first half of the year, a result that beat market expectations.

Smiths Group was the biggest casualty as shares in the global IT provider fell by 3.41 percent, or 38 pence, to 1,075 pence.

Pennon Group -- a water and waste management utility that owns SouthWest Water -- also slipped back 0.71 percent, or 5.20 pence, to 730 pence.

Lloyds Banking Group remained the most traded blue-chip with investors exchanging 96.4 million units in the beleaguered lender. This was followed by Vodafone which saw 62 million being sold in relatively quiet trade as traders had one eye on the Olympic coverage.

On the currency markets, sterling was unaffected by news that the Bank of England was slashing its growth forecast.

The central bank warned that Britain's gross domestic product (GDP) would flatline in 2012, down from the central bank's previous forecast of just below 1.0 percent.

The gloomy forecast failed to trouble the pound as the revision had been widely expected by traders, and sterling managed to post decent gains against both the dollar and euro.

At 17:14 BST, sterling climbed to $1.5659 from $1.5621 at the same time Tuesday.

The British currency rose to 1.2666 euros from 1.2599 over the same period.

Source: http://news.yahoo.com/london-shares-hold-firm-171227417.html

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