RAMSEY CROOKALL & CO 14th September 2012

      Morning Report

The FTSE 100 is up 1.4% at 5899.06, maintaining healthy gains, as markets cheer the latest move from the Fed to stimulate the US economy. Miners lead the advance. Meanwhile, euro-zone finance ministers prepare to gather in Cyprus ahead of two-days of informal meetings, where Spain and Greece will likely be on the agenda.

The Fed announced that, in order to bolster the economy and make sure that inflation stays close to its target, it would engage in a third round of quantitative easing (QE3) by buying more mortgage-backed securities at a pace of $40bn per month. It is also sticking with Operation Twist, the programme where it swaps short-dated securities for longer term securities.The announcement last night prompted the Dow Jones Industrial Average to rise by 206.51 points to its highest level since late 2007, and the S&P 500 by 23.43 points to its highest closing point since December of the same year.

Mining stocks were putting in an impressive performance as metals prices gained on a weaker dollar after the Fed announcement. Investors are hoping that an improved US conomy will boost the demand for commodities. Kazakhmys, Evraz, Fresnillo, ENRC, Vedanta, Antofagasta and Anglo American all gaining over 6%.

Analyst Patrick Jones from Nomura said this morning: "The US Federal Reserve's announcement of further quantitative easing could provide support for commodity prices and the mining sector. During the 2010 QE2 rally, the copper spot price rose by ~50%, while copper equities doubled on average." The broker said it continues to favour higher quality copper miners over their higher beta peers.

Royal Bank of Scotland (RBS), Barclays and Lloyds were also akin decent gains. RBS announced this morning that it is to launch an initial public offering (IPO) of its Direct Line Insurance Group, completing one of the conditions of its £45.5bn bailout from the government in late 2008.

InterContinental Hotels shareholders celebrated the news of the hotel group's special division, which will be 108.4p per share. The Holiday Inns group announced on August 7th that it planned to return $0.5bn of funds to shareholders via a special dividend tied to a share consolidation, plus another $0.5bn through a share buy-back programme, and it has now made good on that pledge.

Defence contractor Chemring jumped after pushing back the deadline for The Carlyle Group to make an offer, after not receiving word the US asset management group.

Pubs group JD Wetherspoon was in demand after its new financial year has got off to a flying start, helped by a strong performance during the Olympic and Paralympic Games.

Second-tier miners were following their blue-chip peers higher, with Aquarius Platinum, Ferrexpo, Talvivaara, Lonmin and Centamin on the up.













THE FTSE 100              @ 10:10      Up      81      @      5901 THE DOW JONES            closed        Up      206     @     13539 THE NASDAQ               closed        Up      41      @      3155

Exchange Rates GBP – USD        @       10:10              1.6186 GBP - EURO      @       10:10              1.2424