BP losses hold Footsie back

The FTSE 100 Index closed in negative territory today after profit updates from BP and Tesco failed to excite and investors cashed in on mining stocks.

Shares in oil giant BP were on the slide after it posted a 4% fall in first-quarter profits to 5.27 billion US dollars (£2.95bn).

Other oil heavyweights in the sector – which account for 20% of the index - followed suit driving the Footsie 12.1 points lower at 6086.6.

Shares in BP fell 10p to 701.5p after profits were hit by storm damage to rigs in the Gulf of Mexico and the shutdown of the company’s biggest refinery. Following suit, Cairn Energy slid 49p to 2370p while Royal Dutch Shell fell 12p to 2030p.

Tesco was also out of favour with investors as record profits of £2.2 billion were overshadowed by signs of slowing growth in the UK.

The supermarket group is feeling the heat from resurgent competitors including Sainsbury’s amid worries over a drawn-out probe into the grocery market.

Even the promise of a £1.5 billion buy-back programme failed to keep investors on-side today and the stock slipped 3.5p to 323.25p.

Tesco shares have failed to reflect the dominance of the chain over the past year, with the stock just 4% stronger in a booming market.

Banks were in the money after their performance during the previous session was marred by profit-taking, with Halifax and Bank of Scotland owner HBOS rising 14.5p to 966.5p and Barclays up 4.5p at 680.5p.

However, mining stocks gave back some of their recent strength. Xstrata was down 36p to 2092p and Anglo American slid 37p to 2424p.

Jimmy Yates, trader at CMC Markets, said: “Despite some upbeat corporate earnings news early today the Footsie fell back into negative territory as a spate of profit taking swept through the mining sector.”

Elsewhere, leisure group Whitbread initially rose following its announcement that it planned to sell a sizeable chunk of its Brewers Fayre and Beefeater pub restaurants but closed 2p lower at 1155p.

It will also review the “nature and size” of its investments in the Pizza Hut and TGI Friday’s chains as it continued to take action against stagnant sales.

And computer games retailer Game slumped as annual profits fell 71% and it forecast a very competitive year in the UK before Sony launches its PlayStation 3 console in November.

Although it raised its annual dividend by 15%, investors trimmed their holdings in Game and its shares fell 3% or 2.5p to 79.5p.

Meanwhile, shares in the in-flight catering and retail firm Alpha Airports were suspended after its auditors withdrew approval of the company’s financial results.

The day’s biggest blue chip risers were Amvescap up 15.5p to 574p, Capita ticked 12.5p higher to 475.75p, British Airways up 8.75p to 343.25 and British Sky Broadcasting up 12p to 527p

The heaviest fallers were Cairn Energy off 49p to 2370p, International Power off 5.25p to 303, Xstrata off 36p to 2092 and Anglo American off 37p to 2424p.