RAMSEY CROOKALL & CO 4th July 2012 Morning Report

The FTSE 100 is down 0.2% at 5674.06, maintaining small losses following the release of U.K. services PMI data. The data was worse than expected, coming in at 51.3 from 53.3 in May and lower than the 52.8 level that had been forecast. Investors are eagerly awaiting  ex-Barclays CEO Bob Diamond's appearance in front of the Treasury Select Committee this afternoon.

Financials were under the weather early on with Standard Chartered, ICAP, Aviva, HSBC and Legal & General among the worst performers.

Under-pressure banking group Barclays was in the red after Nomura downgraded its rating on the stock from 'hold' to 'reduce'. The broker said it sees "material uncertainties from the vacuum of top management as well as the shape and direction of the group under new leadership, potential for losses linked to LIBOR, weak capital market revenue, concern about the dividend at Barclays, driven by current uncertainties, and the ongoing problem of weak BarCap profitability."

Heavyweight stocks British Land, Babcock and Burberry fell after going ex-dividend. From today, investors will not have the right to their latest dividends. Also providing some downward pressure on British luxury brand Burberry were reports that retail sales in Hong Kong grew at their weakest pace since 2009 in May, just 8.8%, with luxury spending particularly weak.

Oil giant Tullow fell despite revealing that it revenues in the first half of 2012 would be a record $1.15bn, up from $1.06bn the year before.

Supermarket peers Morrisons and Tesco were both in the red after ING downgraded its ratings on the stocks to 'hold' and 'sell', respectively.

Tobacco giants Imperial Tobacco and British American Tobacco was in demand after Moody's Investors Service said that European tobacco companies will "continue to generate good cash flow thanks to the pricing inelasticity of tobacco products and growth in cigarette consumption in emerging markets." The ratings agency's outlook for the sector over the next 12-18 months is "positive".

Fund manager Henderson was a heavy faller after Morgan Stanley downgraded its rating on the stock to 'equal weight'. Meanwhile, price comparison website firm Moneysupermarket. com was being lifted by an upgrade by UBS to 'buy'.

Support services firm Carillion dropped after confirming predictions that its profits will be lower in the first half of the year.

THE FTSE 100             @ 10:00         Down     13      @      5,674 THE DOW JONES            closed          Up       72      @      12943 THE NASDAQ               closed          Up       24      @      2976









Exchange Rates GBP – USD        @      10:00                 1.5650 GBP - EURO    @      10:00                 1.2431