Bad day for BP on London Exchange

Battered oil giant BP was hit by another sell-off today as £5bn (€6.06bn) was wiped off the value of the blue-chip heavyweight.

Battered oil giant BP was hit by another sell-off today as £5bn (€6.06bn) was wiped off the value of the blue-chip heavyweight.

Shares fell by as much as 12% as the political storm over the Gulf of Mexico spill showed no signs of abating and investors worried over a US threat to force a dividend cut.

BP eventually closed 6.6% or 26.05p lower at 365.5p despite a second successive day of gains for the wider FTSE 100 Index, which finished 46.6 points ahead at 5132.5.

The firm was forced to put out a statement saying it was not aware of any reason for a plunge in its New York-listed shares overnight, although these bounced back strongly as Wall Street markets opened this afternoon.

The Bank of England's decision to hold interest rates and its quantitative easing programme unchanged was widely expected by the market and had little impact.

But positive US jobs data and promises of short-term help for the banking sector from the European Central Bank lifted sentiment.

With no surprises on rates coming from the ECB either the pound saw a steady day, trading at 1.46 against the dollar and 1.21 against the euro.

Banking stocks had been under early pressure after the Office of Fair Trading (OFT) announced a study into some of their fees and services, although they recovered as the session wore on.

Royal Bank of Scotland rose 1.08p to 43.16p while Lloyds Banking Group cheered 2.44p to 55.91p and Barclays was up 5.15p to 287.85p.

In the consumer sector, Home Retail Group followed BP lower with a 4% drop after it posted a disappointing trading update from its Argos business.

The catalogue chain said like-for-like sales were down 8.1% in the first quarter of its financial year, offsetting a solid performance at DIY arm Homebase. The shares, which have recently been helped by rumours of bid interest from Asda, were 9.7p lower at 228.3p.

Supermarkets were also on the back foot with Morrisons down 2p to 264.7p, Sainsbury's off 1.5p to 323.1p and Tesco down 0.9p to 401.55p. Analysts expect food inflation to weigh on sales figures from Tesco and Sainsbury's next week.

The leading Footsie riser was chip designer ARM Holdings, which surged 6% or 6.1p to 290.1p amid talk that US giant Apple was considering a potential bid.

Mining stocks also gained ground on the back of Chinese trade figures which helped the sector yesterday. Mining stocks were well represented among the risers with Eurasian Natural Resources and Kazakhmys adding 44p to 1026p and 38p to 1144p respectively.

In the FTSE 250, consoles and games firm Game Group was down 4.4p to 85.65p ahead of a looming trading update while publishing firm Trinity Mirror - whose relegation from the second tier was confirmed yesterday - was 1.5p lower at 84.9p.

The biggest Footsie risers were ARM Holdings up 16.1p to 290.1p, Burberry ahead 37p to 784p, Autonomy up 88p to 1915p and Lloyds up 2.44p to 55.91p.

The biggest Footsie fallers were BP down 26.05p at 365.5p, Home Retail off 9.7p at 228.3p, Royal Dutch Shell down 19p at 1684p and Morrisons down 2p at 264.7p.

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