RAMSEY CROOKALL

9th  August

Morning Report

The FTSE 100 is down 3.84%, taking another leg down and officially entering bear market territory. Banks have fallen sharply again, with RBS down 10% and Barclays down 7.8%. Investors now look to the FOMC rate announcement after today’s close for more federal commentary on the direction of the US economy and the possibility of more quantitative easing. Meanwhile, traders digest disappointing UK trade and industrial production figures for June.

Shares of BP and Royal Dutch slid 4% or more each as the price of crude oil tumbled further. Oil futures for September delivery fell $2.88 to $78.38, as investors turn away from perceived riskier investments. Companies with links to economic growth are also being  hit hard. Shares of luxury- goods retailer Burberry Group PLC fell 4.8%, and home-improvement retailer Kingfisher PLC slumped 4.2%.

Weir Group is faring much better today. The engineer to the oil business has stabilised somewhat, after falling yesterday when Morgan Stanley cut its rating on the stock to "equal weight" from "overweight" citing margin concerns.

In company news, even Greggs, the bakery chain famous for cheap takeaway snacks, is suffering from the tough consumer environment. Like-for-like sales in the 26 weeks to 2 July were up by just 0.4% from the same period a year ago. The shares are sharply lower.

Global hotels group InterContinental Hotels Group saw revenue per available room (RevPAR) grow by 6.7% from a year earlier in the first half of 2011, driven by strong demand in Greater China and the US. Second quarter profit before tax tumbled 11.9% to $111m from $126m the year before.

THE FTSE 100 at 10:20                  Down         194 @ 4874   THE DOW JONES closed                   Down         634         @       10809                          NASDAQ COM closed                      Down         174         @       2357                                Exchange Rates

GBP – USD           1.6336 GBP - EURO          1.1493