DAILY STOCKMARKET REPORT 31 January 2011

Markets

London - The FTSE 100 slid 83.71 points to 5,881.37 on Friday as British consumer confidence plunged the most since 1994. U.K. consumer confidence fell 8 points from December to minus 29 this month, the lowest since March 2009, a report by GfK NOP Ltd. showed today. All five measures of the index of sentiment fell, with a gauge on the climate for making major purchases dropping 22 points to minus 29.

Diageo dropped 1.9% to 1,221 pence. The world’s largest distiller is “unattractive compared to beverage peers,” according to JPMorgan, which downgraded the company to “underweight” from “neutral.” TUI Travel lost 4.5% to 259.8 pence. Natixis cut its rating for Europe’s largest tour operator to “neutral” from “buy.” Mining companies fell in London after Royal Bank of Scotland Group Plc analysts downgraded basic-resource stocks to “neutral” from “overweight.” Fresnillo Plc dropped 1.6% to 1,316 pence, Vedanta Resources Plc declined 4.5% to 2,291 pence and BHP Billiton Ltd., the world’s largest mining company, slid 2.4% to 2,379 pence. BG Group Plc dropped 4.2% to 1,334 pence as clashes between protesters clashed with police in Cairo. BG extracts more than 35% of all the gas produced in Egypt, according to the company’s website.

New York - US indices slumped on Friday as investors grew nervous about political unrest in Egypt. The Dow fell almost 1.4% after President Mubarak implemented a curfew in Cairo, Suez and Alexandria and fighting between police and protesters broke out. Concerns about Egypt overshadowed a report showing the U.S. expanded 3.2% in the fourth quarter. Household purchases, about 70% of the economy, rose at a 4.4% pace, the most since the first quarter of 2006, signalling the world’s largest economy and consumers are recovering from the worst recession since World War II.

The Dow Jones dropped 166.13 points to 11,823.70, the S&P 500 tumbled 23.20 points to 1,276.34 and the Nasdaq plunged 68.39 points to 2,686.89.

In corporate news, Ford Motor Co and Amazon.com Inc both fell after their earnings and forecast, respectively, missed estimates. American Express Co. fell 4.7% to $43.86. Excluding the fourth-quarter charge, the biggest credit-card issuer by purchases earned 94 cents a share, less than the average estimate of 96 cents by analysts. On the upside, Corning, the world’s biggest maker of glass for flat-panel televisions, rose 13% to $21.80 after it said fourth- quarter sales beat the average analyst estimate.

Tokyo - The Nikkei fell 122.42 points to 10.237.92 this morning, its levels this year, as political demonstrations in Egypt continued for a sixth day, and a stronger yen damped the outlook for export earnings. Chiyoda Corp., a plant engineering company that gets almost half of its revenue from the Middle East, fell 2.5%. Sumitomo Mitsui Financial Group Inc., Japan’s No. 2 publicly traded bank, lost 2.7%. Sony Corp., an electronics maker that earns about 40% of its revenue from the U.S. and Europe, sank 2.7%. Konica Minolta Holdings Inc., a maker of imaging equipment, plunged 7.8% after the company cut its operating profit outlook.

Hong Kong - The Hang Seng lost 169.68 points to 23,447.34 this morning, again showing concern tensions will escalate in Egypt. Cosco Pacific Ltd., which operates container terminals, including in Egypt, lost 2.6%. China Unicom (Hong Kong) Ltd., the nation’s second-largest mobile-phone company, slid 1% after saying 2010 profit dropped. Cheung Kong (Holdings) Ltd., the city’s second-biggest developer by market value, lost 2.5% after Centaline Property Agency Ltd. said the number of city apartment sales declined over the weekend.

Economics

US Personal income and spending (Dec) 13:30 GMT/ 08:30 EST

By the time this monthly data for December is released, analysts will have a good sense of the figures already from the Q4 GDP report (not available as of writing). For the time being, analysts have pencilled in 0.3% for personal income growth and 0.6% for the increase in personal spending. The core PCE deflator is expected to rise by 0.1%, with the year-on-year rate staying at 0.8%.

US Chicago PMI (Jan) 14:45 GMT/ 09:45 EST

Other regional manufacturing surveys in January have been solid, and manufacturers in the Chicago area have a positive outlook for this year. Many important sectors have been reporting strong growth: fabricated metals, heavy equipment, autos, tubes and hydraulics. However, the Chicago PMI rose to 66.8 in December, an elevated level that is comparable to the survey’s cyclical peaks over the past twenty years. Analysts think the index may fall to 63 this month.

Corporate

AMEC PLC, the engineering and project management company, announced that it has been appointed by BG Group PLC to provide engineering, procurement, construction, commissioning and project management for all of the BG Group facilities in the central North Sea, including the Armada, North Everest and Lomond platforms. This latest three-year contract has a value of approximately GBP140 million. The award follows AMEC’s existing contract with BG Group for the support of their Armada asset, and effectively triples the size of the services supplied. A number of projects come under the new contract, which includes the implementation of subsea tie backs from the Gaupe and North West Seymour wells to the Armada platform hub and a new subsea tie back to the North Everest platform hub. It also includes a feasibility study for the continued development of the Armada platform as a processing hub. To increase offshore capacity, BG Group has invested in new Additional Living Quarters, or ALQs, on the North Everest platform. Installation of this new ALQ will start in January 2011.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

If you would like to discuss any aspect of financial planning or investment, one of the specialist advisors in Lupton Fawcett’s Asset Management Department would be delighted to help.

Initial meetings are without obligation or charge. Please contact Paul Smith on 0113 280 2095 or email paul.smith@luptonfawcett.com