RAMSEY CROOKALL & CO
8th June 2011
Morning Report
The FTSE 100 is down 0.7%, with losses accelerating. Basic resources stocks lead the declines. Undoubtedly, the Federal Reserve chairman's comments on Tuesday continue to resonate and investors are disappointed that a third quantitative easing package is not a certainty. In addition, a Market News International report that ratings agency Moody's may cut the UK's AAA credit rating has hurt, though Moody's has said a UK downgrade is not its central scenario.
In stocks news, the spell of unusually hot weather over spring had drinkers queuing up at Punch Taverns, a top riser today, helping Britain’s biggest pub operator to a sharp rise in sales in the 12 weeks to the end of May. In the managed division, which comprises the pubs that are run by the company itself, like-for-like sales were up by 7.3% from the same period the previous year, with food sales particularly strong.
Revenue growth in Smiths Group's John Crane division - which supplies advanced technology industrial products for the major process industries - helped underlying sales in the first ten months push ahead of the prior year, offsetting weaker sales from Smiths Detection.
Defence products group Ultra Electronics has won contracts worth £54m with engineer Rolls-Royce to supply reactor control and instrumentation systems for Royal Navy submarines. Ultra said it has been working on the equipment since 2004. Work on the contracts starts immediately and will continue until the end of 2014.
A Carillion joint venture vehicle has been appointed the preferred bidder for a Canadian hospital contract, expected to be worth £390m to the contractor and support services group. Hospital Infrastructure Partners, the joint venture between Carillion, Canadian building contractor EllisDon and two investment firms, has been selected by Infrastructure Ontario and Halton Healthcare Services as the preferred bidder to finance, design, build and maintain the new replacement Oakville Hospital.
THE FTSE 100 at 10:00 Down 47 @ 5817
THE DOW JONES closed Down 19 @ 12139
THE NASDAQ COMP closed Down 1 @ 2711
Exchange Rates
GBP – USD 1.6366
GBP - EURO 1.1163
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