RAMSEY CROOKALL & CO 5th October 2012

Morningn Report

The FTSE 100 is up, paring gains by a touch. Miners continue to lead the upside. On the downside, Tesco is having another disappointing day.It has closed down for the past two consecutive sessions following disappointing results. There are no UK economic data of note so attention will be on nonfarm payrolls at 12:30.

Luxury brand Burberry was among the best performers after Morgan Stanley upgraded the stock to 'overweight' this morning. In contrast, B&Q owner Kingfisher fell after the same US broker downgraded its rating to 'equal weight'.

Oilfield services firm Wood Group rose early on after saying that it is still confident in hitting full-year profit targets, with conditions in energy markets remaining favourable. "We anticipate strong operating cash flow in the second half, and our strong balance sheet provides a robust platform for growth," the group's interim management statement said.

Mining stocks were also in demand early on, with Vedanta, ENRC, Evraz, Kazakhmys and Rio Tinto making gains.

Technology firm Smiths Group was higher after saying that it will launch a $400m bond offering, saying that the funds will be used for general corporate funding purposes and to repay certain existing debt.

Engineering group IMI was a high riser after Morgan Stanley and JPMorgan Cazenove both reiterated their 'overweight' ratings on the shares.

Supermarket group Tesco continued to fall, extending losses after its profits disappointed the markets on Wednesday. Shares are now down over 5% on the week. Both Seymour Pierce and Espirito Santo reduced their target prices for the stock this morning.

Broadband and communications provider KCOM has performed in line with expectations in the first half of its fiscal year, but shares sank after it said that orders in its enterprise division have been a bit below expectations.

Utilities services provider Telecom Plus gained after dangling the prospect of a sharply increased interim dividend in front of shareholders' eyes after a first-half surge in profits. With the group's business proving to be less seasonal these days the group is moving towards a more even split between its interim and final dividend payments each year.













THE FTSE 100             @ 10:00        Up         12     @      5840 THE DOW JONES            closed         Up         80     @     13575 THE NASDAQ               closed         Up        14     @      3149

Exchange Rates GBP – USD        @       10:00                   1.6180 GBP - EURO      @       10:00                   1.2441

Gold USD/Oz                        $1,789