RAMSEY CROOKALL & CO EVENING MARKET REPORT

2nd JUNE 2010

This morning’s rally fizzled out with London closing lower on the day despite a brighter start on Wall Street.

BP recovered much of the early losses closing down 1p at 428p on news that it faces both a civil and criminal probe into the causes of the Gulf of Mexico disaster. The UK company, which has seen over ?40 billion wiped off its value since mid April, is facing increasing anger over the spill, the biggest in American history.

US Attorney-General Eric Holder said last night the FBI and other federal agencies will conduct a criminal and civil investigation into the environmental catastrophe that threatens the livelihoods of thousands along the Gulf coast.

Other oil related stocks are being dragged down along with BP as investors worry over the prospect of oil companies coming under increased constraints on where they can drill. Producers BG Group and Cairn were friendless, as were oilfield support services firms such as AMEC and Petrofac.

In a weak banking sector Barclays fell 8p to 295p after it said its TAV unit has made a recommended cash offer to buy Stockholm-listed carbon developer Tricorona for about ?98 million. The deal, which is expected to complete in the third quarter of 2010, would be accretive to Barclays earnings within one year from completion. Part nationalised banks Lloyds Banking and Royal Bank of Scotland both tumbled after being downgraded.

Prudential is facing calls for a clear out of it senior management after it scrapped its contentious plans to buy AIG’s Asian arm (AIA). In a statement, chairman Harvey McGrath said the Pru took the decision to withdraw after failing to negotiate a cut in the $35.3 billion purchase price for AIA. The Pru’s $221 billion rights issue to finance the deal will now also be scrapped. The shares fell 15p to 560p. Analysts said it could spark a break up bid for Prudential, especially with the uncertainty over the management situation.

HE FTSE 100 CLOSED DOWN 11 @ 5151

THE DOW JONES AT 4.30 WAS UP 95 @ 10,1189

THE NASDAQ COMP AT 4.30 WAS UP 25 @ 2248

Exchange Rates

GBP – USD 1. 4625

GBP – EUR 1. 1982