RAMSEY CROOKALL & CO

28th June 2012

Morning Report

The FTSE 100 is down 0.7%, maintaining losses, following the final release of 1Q GDP data. The data confirms the UK economy contracted by 0.3% quarter-on-quarter but on an annual basis, the contraction was bigger than expected at 0.2%.

Banking stocks were under pressure early on. Barclays was under fire after yesterday's news that it had manipulated interbank lending rates, leading some to ask for the resignation of CEO Bob Diamond. Sector peers RBS, HSBC and Lloyds were also lower.

Steel giant Evraz was extending losses made yesterday when German peer Salzgitter gave a gloomy outlook for the industry, saying that the Eurozone economy has deteriorated and steel processors and stockholding steel traders are expecting business to "stagnate". Goldman Sachs slashed its target for Evraz this morning from 700p to just 400p, but kept a 'buy' rating.

Potential merger partners Xstrata and Glencore were out of favour early on. There are rumours that Glencore could walk away from the possible combination after Xstrata shareholder Qatar Holdings demanded a high exchange ratio.

Consumer products group Reckitt Benckiser fell after Credit Suisse downgraded the stock to 'neutral' and cut its target from 3,800p to 3,500p.

Meanwhile, gold miner Polymetal was suffering from a downgrade by UBS from 'buy' to 'neutral' and a target cut from 1,060p to 970p. Analysts said that the ratings cut was for two key reasons: "recent strong share price performance and weaker silver prices".

Google reveals a new tablet computer, home-entertainment device and Android mobile- software platform, as it gears up for further battle with Apple and others.

THE FTSE 100              @ 10:00      Down       38      @      5,485 THE DOW JONES            closed        Up         92      @      12627 THE NASDAQ closed Up 21 @ 2875

Exchange Rates GBP – USD        @      10:00                  1.5552 GBP - EURO      @      10:00                  1.2510