RAMSEY CROOKALL & CO 21st June 2012

Morning Report

The FTSE 100 is down 0.5% at 5592.13, maintaining losses despite strong retail sales in May. U.K. retail sales rose 1.4% in May on the previous month and 2.4% on the year. Miners continue to lead the declines in London following disappointing PMI data out of China.

The Chinese manufacturing sector purchasing managers' index for the month of June compiled by Markit fell from 48.4 to 48.1 in June, a seven-month low. Many observers believe that the Asian powerhouse will bottom-out in the current quarter.

In other news, the keenly-awaited policy decision in the US last night failed to boost markets as was hoped, after the Federal Reserve also downgraded its growth expectations for the world's largest economy. Fed Chairman Ben Bernanke said that the European crisis was "slowing US economic growth." While the Federal Open Market Committee decided to extend its 'Operation Twist' programme, which involving the sale of short-term debt in exchange for long-term securities with the intention of flattening the interest rate curve, the central bank said it expects US GDP to grow by 1.9-2.4% in 2012, down from earlier predictions of a 2.4-2.9% expansion.

Concerns over the Chinese economy pressured falls in the mining sector this morning as investors expressed worries about slowing demand. Vedanta, Kazakhmys, Xstrata, Glencore, Rio Tinto, BHP Billiton, Antofagasta, Anglo American and Polymetal dominated the fallers list. With investors fleeing from these 'riskier' assets, defensive sectors were in demand with pharmaceuticals group GlaxoSmithKline and AstraZeneca, and tobacco giant BATS on the rise.

FTSE 250 construction equipment leasing firm Ashtead Group jumped early on after reporting record profits as tight cost control and strong demand in the US helped the firm beat analyst expectations.

Bid talks which got the market excited on Wednesday about Invensys, the maker of rail signalling and industrial automation systems, have hit the buffers already causing shares to pull back. In response to press speculation about an approach from Emerson Electric for some of the company's assets, news of which leaked out on Wednesday, Invensys said talks with Emerson are no longer taking place.

THE FTSE 100      @ 10:00  was   Down      30          @     5,591 THE DOW JONES            closed      Down      12          @     12824 THE NASDAQ               closed      Flat                  @     2930











Exchange Rates GBP – USD        @      10:00                 1.5701 GBP - EURO      @      10:00                 1.2399