BP losses stall FTSE

More losses for BP and a lacklustre start to trading in New York ensured the FTSE 100 Index missed out on a third straight session of gains today.

Early progress for London’s blue-chip index was eroded as the day wore on, leaving the Footsie 6.7 points lower at 5188.4 after one of its strongest sessions of the year on Thursday.

Analysts warned the European debt fears that have rocked markets in recent weeks were still in the minds of investors.

However, there was a vote of confidence from leading broker Morgan Stanley, which raised its year-end target for the Footsie to 5800 from 5000.

There was also a boost from an improved Libor rate – the indication of the interest rate that banks must pay to borrow from each other – after a fortnight of consistent increases.

IG trader Yusuf Heusen said: “We have seen markets pull themselves back from the brink over the last five days but beaten-up investors will be looking for more reassurance that this has not been just a pause before the next lurch downwards.”

America’s Dow Jones Industrial Average was in negative territory by the time of London’s close following mixed reports on the US economy.

Figures showed consumer spending was stagnant in April while incomes posted a tiny advance, offering signs that the economic recovery could slow.

However, this was not enough to prevent the dollar from maintaining its recent strength against the pound. Sterling stood at $1.44 following a 0.5% drop and was down by a similar level against the euro.

The major corporate news centred on BP and Prudential as the pair grappled with high-profile difficulties.