RAMSEY CROOKALL & CO

EVENING REPORT

26 OCTOBER 2010

With Wall Street tipped to open lower London’s leading shares fell back further over the lunch time period, resulting in the FTSE 100 subsiding below 5700, before finishing at 5707 down 44p..

Cairn Energy topped the list of fallers after it failed to find a commercial discovery at either the T8-1 or T4-1 wells offshore Greenland. The company has suspended drilling in the area for the rest of the year, as planned, and will resume in the spring.

The boom in mobile devices using ARM Holdings’ intellectual property was largely responsible for chip designer’s solid third quarter. Revenue rose 34%, but analysts at Panmure Gordon said the numbers were expected. They also remain bearish on the stock as “the share price is discounting a fairly stellar performance over the next few years”. KBC Peel Hunt was another broker suggesting the share price has got ahead of itself in recent months. Arm closed down 23p at 366p.

Insurers Prudential, Legal & General and Standard Life were injured by a Bank of America Merrill Lynch downgrade. The Americans cut their rating on the sector following a recent strong run.

Banks started well, but most soon turned lower - Lloyds being an exception. Bank of England governor Mervyn King launched a fresh attack on them over the credit crunch and warned that much more equity will be necessary to build up their capital bases.

THE FTSE 100 CLOSED DOWN 44 @ 5707

THE DOW JONES AT 4.30 DOWN 5 @ 11,158 THE NASDAQ COMP AT 4.30 DOWN 1 @ 2490

Exchange Rates

GBP – USD 1. 57

GBP – EUR 1. 12 ??

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