RAMSEY CROOKALL & CO

7th August 2012

Evening Report

The FTSE 100 ends 0.6% ahead at 5841.24, the highest close since April 3, but underperforming other core European markets, weighed down by sharp losses for Standard Chartered. Expectations of coming central bank action continue to hold markets . Standard Chartered's shares drop 17% as fears mount about the full implications of charges leveled in the US. Wednesday sees the release of the BOE Inflation Report.

Emerging markets-focused banking titan Standard Chartered fell after the US banking regulator accused it of collusion with the government of Iran to hide transactions from authorities. Nomura, Oriel Securities and Bank of America all downgraded their ratings on the stock this morning. Nomura cut its recommendation for the stock today, from 'buy' to 'neutral'. While the broker said that StanChart's response to the issue gives "some comfort", it also commented that it sees "negative headline risk" and therefore keeps a slightly cautious stance. Perhaps significantly, ratings agency S&P has indicated that the New York State regulator´s prove has no implications for the bank´s credit standing.

Sector peers Royal Bank of Scotland and Barclays were also firmly out of favour. Evraz is higher for a second day after UBS yesterday removed the stock from its least preferred list.

Legal & General was also heading lower, despite hiking its interim dividend by almost a fifth as it expressed "resilience" amidst tough conditions.

Heading the other way was Holiday Inn owner InterContinental Hotels after seeing revenues rise in the first half and saying that it would return $1bn to shareholders.

Mining giant Xstrata advanced despite reporting a 23% decline in profits in the first half of the year after it was hit by a drop in commodity prices as well as increasing costs. It wasn't the only miner to be on the up, with Polymetal, Anglo American, ENRC and Glencore all chasing metal prices higher

THE FTSE 100             closed        Up           32      @      5,841 THE DOW JONES            @ 17:00       Up         81      @     13199 THE NASDAQ               @ 17:00       Up           31      @      3021 Exchange Rates GBP – USD        @      17:00                 1.5656 GBP - EURO      @      17:00                 1.2604