RAMSEY CROOKALL 13th  October 2011

Afternoon Report

The FTSE 100 trades lower, extending losses. Industrials and miners lead the declines after China posts a narrower-than-expected September trade surplus. Banks also slip as commentators assess the likely fallout from possible new stress tests in the euro zone. U.K. banks, however, are not faring as badly as European peers.

Rolls-Royce rallied 6.87% after the aerospace group late Wednesday announced a new joint venture with United Technologies Corp. division Pratt & Whitney to develop engines for mid-size aircraft.

Investment manager Ashmore Group has dropped 5.52% after it said its assets under management had shrunk by nearly 11% over the fiscal first quarter.

British Airways parent International Consolidated Airlines Group rose 0.9% in London after Deutsche Bank upgraded the stock to buy from hold, citing a compelling valuation and stronger- than-expected premium traffic in September.

Newsagents WH Smith reported a record profit performance from its Travel segment in the year to the end of August. Profit before tax rose 4% to £93m from £89m the year before. Total group sales were £1,273m (2010: £1,312m) with like-for-like (LFL) sales down 5%. Travel sales grew by 1% to £455m, down 3% on a LFL basis. High Street sales were down 5% at £818m and down 6% on a LFL basis (excluding entertainment, LFL sales were down 3%).

Credit Suisse downgrades United Utilities Group to neutral from outperform and cuts the target price to 660p from 674p. It says United Utilities has a "difficult" customer base. After Northumbrian Water Credit Suisse notes United Utilities has the greatest proportion of customers within its catchment area who claim unemployment benefits and has the greatest amount of revenue that has been outstanding for more than 12 months. In addition, the brokerage says United Utilities has one of the largest capital expenditure budgets for the current regulatory price review.

THE FTSE 100 at 12:00                         Down        44         @         5397 THE DOW JONES closed                          Up          102        @         11518             NASDAQ COMP closed                            Up          21         @         2604              Commodities Spot Gold $/Oz           $1668                    Down                     0.38 %     Brent Crude Oil          $107.74                  Down                     0.74 %

Exchange Rates GBP – USD           1.5706 GBP - EURO          1.1437