RAMSEY CROOKALL

5th    August

Morning Report

The FTSE 100 is sharply down but off initial lows where the index hit an intraday low of 5202.62. The banks still dominate the red side, with Royal Bank of Scotland down 8.3%, Barclays down 7.7%. There are some stocks which have managed to crawl upwards; Glencore is up 2.3%, Inmarsat up 0.7. Non-farm payrolls will be the focus later on,

Stocks are on the slide following the rout in Wall Street last night, with Royal Bank of Scotland in the eye of the storm after exposure to Greece pushed the bank into losses in the second quarter. Exposure to Greek government bonds and a charge for mis-selling of Payment Protection Insurance (PPI) meant the part-nationalised bank posted an attributable loss of £897m in the quarter to 30 June, against a profit of £257m in the same period the previous year. It was hit by a £850m charge for PPI claims and £733m provision related to Greek government bonds.

Software provider Logica is sharply lower even after it reported a 5% rise in interim revenues in the six months to 30 June but pre-tax profits were lower after its exposure to the squeezed public sector pushed it to an underlying loss in the Benelux countries. Full-year revenue growth is expected to be at a similar level to the first half, but margin improvement now depends on progress in Benelux, the company said.

Food manufacturer Premier Foods's 29% drop in trading profits from ongoing operations has left a bad taste. It was hurt by higher raw material costs and a temporary pricing dispute with its major customer, sending its shares lower. For the half year ended 25 June, the company, which makes Hovis bread and Hartley’s jams, saw profits fall 29% to £69m, down from £94m, in the corresponding quarter a year earlier.

First half profits at insurance titan Prudential jumped by a quarter to top expectations, driven by strong growth in Asia. Operating profit, on an International Financial Reporting Standards (IFRS) basis, rose 25% from £0.85bn to £1.06bn, ahead of expectations of £0.96bn.

THE FTSE 100 at 10:00              Down             113            @       5279

THE DOW JONES closed               Down             512            @       11383                          NASDAQ COM closed                  Down             136            @       2556 

                                   Exchange Rates GBP – USD          1.6286 GBP - EURO         1.1514