Flat start for FTSE

Leisure group Whitbread gained ground after resilient results on a flat day for the wider London market.

Leisure group Whitbread gained ground after resilient results on a flat day for the wider London market.

A strong performance by coffee chain Costa and recent improvement from its Premier Inn budget hotels helped the firm post better than expected results through the worst of recession.

Whitbread’s 2% or 31p gain to 1321p came despite a fall for the FTSE 100 Index, which was off 8.7 points to 5201.4 by mid-morning.

The Footsie closed above 5200 for the first time in more than a year yesterday and traders will hope that third quarter results from the US will continue to buoy sentiment.

The market was unperturbed by a bigger than expected fall in inflation during September, signalling that interest rates could stay lower for longer.

But the Footsie was dragged lower by weakness among major banking stocks, led by Lloyds Banking Group. The bank fell 3%, or 2.6p to 88.98p, after the Daily Telegraph reported it would have to pay the Government a break fee of more than £1bn (€1.06bn) to withdraw from its asset protection scheme.

Barclays meanwhile lost 10.5p to 362.15p while Royal Bank of Scotland shed 0.8p to 632p.

Outside the top flight, ITV shares surged 8% or 3.8p to 51.1p after it announced plans for a £120m (€127m) bond issue and said advertising revenues continued to show signs of improvement.

Analysts said the bond issue showed the company was still functioning despite its leadership crisis.

Building firm Carillion meanwhile added 3.8p to 290.8p after confirming a support services deal with BT worth a potential £1bn (€1.06bn) over seven years.

But housebuilder Bellway was down 5.5p to 800p as investors took profits after better than expected annual results. The firm is spending £120m (€127m) on new land and slashed debt by more than £180m (€192m) to strengthen its balance sheet.

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