RAMSEY CROOKALL & CO

15th June 2011

Afternoon Report

The FTSE 100 is down 0.2%, off earlier lows but still in red. Glencore International is the biggest faller, down 2.9% after saying it has no plans to buy Eurasian Natural Resources. Elsewhere, banks are in focus with Chancellor Osborne expected to back ICB calls for high-street operations to be ring-fenced.

Supermarket group Sainsbury is going well after it saw like-for-like sales growth in line with management's expectations in the 12 weeks to 11 June, though the growth rate was below some brokers' estimates. "Fuel price inflation combined with strong fuel volume growth resulted in an increase in total sales of 7.3%, with like-for-like sales up 4.8%. Excluding fuel, total sales were up 4.3%, with like-for-like sales up 1.9%," chief executive Justin King revealed.

Meanwhile, Tesco, which yesterday failed to report a move back into sales growth in the UK, is lower again.

Consulting and business services group Mouchel is another big faller today after it warned that it faces 'very challenging' trading amid UK local authority spending cuts. "The short-term outlook for the group continues to be very challenging and is heavily influenced by the steps the Coalition government is taking to rapidly bring down the deficit in public spending," it said in a company statement.

Also in mining, sector giant Rio Tinto is speeding up the expansion of its iron ore operations in the Pilbara region of Western Australia. It is pumping in US$676m (£412m) to achieve capacity expansion to 333m tonnes a year in the first half of 2015, six months earlier than planned.



THE FTSE 100 at 12:00 Down 11 @ 5791

THE DOW JONES closed Up 123 @ 12076

THE NASDAQ COMP closed Up 39 @ 2678



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