RAMSEY CROOKALL

6th  July    Afternoon Report

The FTSE 100 down 0.6%, as euro-zone debt worries escalate after Moody's downgrade of Portugal to junk late Tuesday.

Bank stocks have taken a hit as fears about the sector's exposure to European sovereign debt weigh. Royal Bank of Scotland trades 3% lower with Barclays off 2.6%.

The London market did recover slightly mid morning after German industrial orders figures rose by 1.8% on the month in May, against a DJN forecast for a 0.5% fall; but soon slipped back to earlier lows. U.S. ISM non-manufacturing data is to come later this afternoon.

Deutsche Bank has raised Associated British Foods target to 1050p from 950p. It has noted that favorable dynamics in European sugar are likely to keep prices high and generate a major windfall for Associated British Foods.

Advertising conglomerate WPP is one of the heaviest fallers in the large-cap index. It has acquired a majority stake in Indian advertising agency, Mindset Advertising.

Serco Group is expected to accelerate its organic growth to 7% in '12 and 8% in '13 as a result of increased outsourcing and less drag from government spending cuts in the UK, Bank of America Merrill Lynch said. Serco is also expected to have strong growth in the Asia-Pacific region. Serco is currently trading up 2.75%.

Sportswear retailer Sports Direct’s move into the fashion world with the acquisition of 80% shareholdings in the Scottish fashion chains USC and Cruise Clothing for £7m has pleased the market.

Turning to smaller companies, shares in Coal of Africa roared higher after the miner said it had been granted approval to build its project at Vele in South Africa. Construction is expected to be completed in six to nine months and production is expected to reach 1m tonnes a year.

THE FTSE 100  at 12:00 Down 38 @ 5985                THE DOW JONES closed                            Down            12      @     12569                                 NASDAQ COMP closed                              Up              9       @     2825           Exchange Rates GBP – USD           1.6014 GBP - EURO         1.1169