RAMSEY CROOKALL & CO

8th October 2012

     Morning Report

The FTSE 100 trades down 0.6%. Mining stocks are the worst performers amid worries about growth after the World Bank cuts its forecast for economic expansion in developing East Asia. There are no major UK data releases due Monday, though some attention will be on Chancellor of the Exchequer George Osborne's speech at the Conservative Party conference.

Steel giant Evraz was a heavy faller after Nomura revised its steel demand growth forecast from 3% to 0% for 2013, saying that it expects "further weakness" in the sector. "We expect continued weakness in the sector as investors are unlikely to buy the equities into what is already expected to be a challenging 3Q results season," the broker said.

Sector peers Fresnillo, Vedanta, ENRC and BHP Billiton were also out of favour, along with financial stocks Old Mutual, Lloyds and Royal Bank of Scotland.

Shares in BAE Systems were under pressure after its largest shareholder Invesco (which owns 13.3%) has highlighted its "significant reservations" with the group's potential merger with aerospace giant EADS. The fund manager said that it "does not understand the strategic logic for the proposed combination", saying that the merger would materially jeopardise BAE's position in the US defence market.

Imperial Tobacco was trading lower after Nomura downgraded its rating on the stock from 'neutral' to 'reduce' as part of its sector review on the European tobacco sector. The broker lowered its view on the sector from 'bearish' to 'neutral' this morning, saying that after three years of outperform, there is a risk of underperformance as many of the drivers of the 19% per annum average total shareholder return since 2009 are less supportive from here.

Cookson, which provides materials and know-how to the steel production, foundry castings and eletronics markets, has warned on full-year profits after a sticky third quarter for its Engineered Ceramics division. Shares dropped around 14.55% early on.

Michael Page International, the recruitment consultant, fell after warning that full-year operating profit will be slightly below current analyst expectations in its second disappointing trading update in a row. Sector peer Hays was also lower.

THE FTSE 100              @ 10:00              Down        36      @      5834 THE DOW JONES            closed                Up          34      @     13610 THE NASDAQ               closed                Down        13      @      3136

Exchange Rates GBP – USD        @       10:00                1.6083 GBP - EURO      @       10:00                1.2396















Gold USD/Oz                                   $1,770