RAMSEY CROOKALL & CO 19th July 2012 Morning Report

The FTSE 100 trades up 0.1%, following gains seen in the US on improved housing starts and some positive corporate results. Kingfisher tops the list of fallers following a disappointing 2Q update, while Vedanta and BG Group are off following broker downgrades. In focus is Spain's EUR2 billion to EUR3 billion auction of 2014, 2017, 2019-dated bonds as is a vote in Germany regarding aid to Spanish banks.

Kingfisher, Europe's largest home improvement retailer, was among the worst performers after sales were hit by the extraordinary bad weather in the second quarter, though trading in the UK and Ireland was resilient.

Engineering groups IMI, GKN and Weir was high risers after Swedish peer Sandvik released better-than-expected second-quarter results. Meanwhile, Croda International gained on the back of positive read-across from AkzoNobel.

Gas group BG was under the weather after Credit Suisse downgraded the stock to 'neutral' and cut its target from 1,660p to 1,500p. Mining firm Vedanta dropped after HSBC slashed its target from 1,320p to 1,000p, though it maintained its 'overweight' rating.

Banking group Lloyds fell after it agreed with the Co-op to sell hundreds of its branches for an initial consideration of £350m, and up to an additional £400m in present value.

Halfords advanced after saying that Chief Executive David Wild is on his bike leaving the non-executive Chairman Dennis Millard in charge of the shop while the struggling seller of bikes and car parts looks for a replacement. The group also reported that LFL sales gained 0.9% in the five weeks to June 29th.

Oilfield services firm Wood Group rose after saying that Chairman Sir Ian Wood is to retire in November and will be succeeded by the group's CEO, Allister Langlands.

West Africa-focused gold miner Avocet Mining was also in demand after it revealed that CEO Brett Richards is to resign and will be replaced by the group's Chief Operating Officer (COO).

Digging deeper at the Simrit-2 exploration well in the Kurdistan region of Iraq has paid off for oil exploration firm Afren as the well's total net oil pay has increased to 460 metres. Shares jumped 7%.

Elsewhere, AIM-listed sports retailer JJB dropped after saying that it is having to slow down its refurbishment programme as poor sales mean the group will need an injection of cash from its backers earlier than planned.

THE FTSE 100             @ 10:00       Up          5     @      5,690 THE DOW JONES            closed       Up         47     @     12908 THE NASDAQ               closed        Up         32     @      2942 Exchange Rates GBP – USD        @      10:00             1.5653 GBP - EURO      @      10:00             1.2755