RAMSEY CROOKALL & CO May 18th  2012

Evening Report

The FTSE 100 closed 1.3% lower at 5267.62, with banking stocks leading declines after Moody's downgraded  16 Spanish banks, including Santander which operates in the UK. Reports of a short-selling ban on Spanish banks earlier helped.  Mining stocks declined on fears that Chinese growth could come in under expectations after data from the country paint a weak picture of house prices. In the US, Facebook makes its debut, trading around $42, above its $38 issue price.

Miners have been firmly under a cloud since Goldman Sachs lowered its forecast for second quarter growth in China's gross domestic product (GDP) to 7.9% from 8.5% previously. Vedanta, ENRC and Xstrata  all remained firmly lower.

However, Fresnillo, Antofagasta, Polymetal and Kazakhmys were all seen heading higher, as the price of precious metals were driven higher by nervous investors.

Banks were under pressure on continued worries over the future of the Eurozone and as the credit agencies weigh in with more ratings cuts.

Ratings agency Fitch cut Greece’s rating on Thursday to ‘CCC’ from ‘B-’ in order to reflect the heightened risk that the country may not be able to sustain its membership in the Economic and Monetary Union (EMU). Lloyds was leading the way lower.

Highly acquisitive firm WPP  closed lower, having announced that it is to acquire a majority stake in Russia-based digital marketing services agency, Grape.

International security solutions supplier G4S also dropped lower after announcing that it has lined up John Connolly, the Chairman of consultant engineer AMEC, to be its next Chairman to replace Alf Duch-Pedersen, who recently announced his impending retirement. Duch-Pedersen will step down after G4S's annual general meeting on June 7th. In the meantime, Connolly will sit on the board as an independent non-executive director.

THE FTSE 100             closed         Down       70      @      5,267 THE DOW JONES            @ 17:00        Down       38      @     12404 THE NASDAQ               @ 17:00        Down       14      @      2799 Exchange Rates

GBP – USD       @      17:00        1.5791 GBP - EURO     @      17:00        1.2414