RAMSEY CROOKALL & CO

31st October 2011

Evening  Report

The FTSE 100 finished down 2.8% lower at 5544. The markets have been weighed down by scepticism surrounding last week's E.U. bailout package as well as the deteriorating economic outlook in Europe.

Meanwhile, the China Iron & Steel Association announced today that iron ore prices could fall even further in the near future, as steel mills in China remain unwilling to buy, while stockpiles at major ports still remain high. "In my personal opinion, the price of imported iron ore will fall further, because the trends for the whole sector are unlikely to get better and steel mills don't dare to buy ore," said vice- chairman Zhang Changfu at a press conference.

The news sparked a steep sell-off in the mining industry today, with Vedanta Resources, Xstrata, Kazakhyms, Lonmin, BHP Billiton and Rio Tinto among the worst performers.

Barclays fell into the red, despite being the highest riser early on, after releasing its third quarter results. At first glance, Nomura was a fan of the results, but after a conference call with the bank, the broker said that it now has a “less positive reaction”. “After the recent rise in the shares and following numbers that were below estimates on an underlying basis, we think some consolidation may be in order,” Nomura said. Nevertheless, the broker still said that it prefers Barclays to other domestic UK banks.

Fellow lenders RBS and Lloyds were registering big falls, down 7.84% and 7.55%, respectively, while Barclays was down 2.93%.

The banking sector seems to be correcting after a strong rise last week on the back of the EU summit agreements. Despite the fall today, the sector is still trading an average 3.6% higher than it was on Monday last week.

THE FTSE 100 Closed                       Down 158      @   5,544

THE DOW JONES @ 16.45                     Down 193      @   12,038

THE NASDAQ COMP @ 16.45                Down 37       @  2,715

Exchange Rates

GBP – USD    @ 16.45      1.613

GBP - EURO   @ 16.45      1.158