RAMSEY CROOKALL & CO

5th May 2011 Morning Report

The FTSE 100 is trading flat following Wednesday's sell-off inspired by a retreat in commodity prices. As such, miners and energy stocks are enjoying a small rally. However, the banking sector is capping gains after a downbeat reaction to earning from Lloyds Banking Group.

First quarter profits fell sharply at part-nationalised lender Lloyds Banking, as the bank took an impairment charge that was half a billion pounds larger than it was expecting, largely to reflect declining Irish property prices. The group saw profit before tax fall to £284m in the first quarter on a combined businesses basis from £1,104m the year before. Underlying income fell to £5.20bn from £5.97bn a year earlier and £5.75bn in the preceding quarter.

Following falls yesterday. Gold miners, such as Africa’s Randgold, which today posted higher profits and production for the first quarter, and Russia’s Petropavlovsk, are among the most prominent risers.

Finally, medical devices firm Smith & Nephew said first quarter revenue was boosted by progress at its US knee franchise while net profit fell. During the first quarter ended 2 April 2011 revenue rose to $1.055bn from $995m the year before. Trading profit fell to $241m from $250m after it incurred higher administrative expenses.

THE FTSE 100 at 9:45         Up 3 @ 5987

THE DOW JONES Closed Down 83 @    12723

THE NASDAQ COMP Closed Down 13 @     2828

Exchange Rates

GBP – USD           1.6481 GBP - EURO          1.1069