FTSE up despite BT battering

BP shares were hit by another major sell-off today despite wider gains for the FTSE 100 Index.

The oil giant - whose board were meeting today to discuss a dividend cut for the first time in 18 years - gave back all of Friday's 7% advance and more to stand more than 9% or 36.45p lower at 355.45p.

The firm's woes belied a better session for most of the top flight's other commodity-based stocks, which helped the blue-chip index finish 38.5 points ahead at 5202.1.

Across the Atlantic, Wall Street's Dow Jones Industrial Average added 1% in early trading, while investors were cheered earlier by a 0.8% monthly increase in industrial production in April across the 16-nation eurozone - a bigger rise than forecast which fuelled recovery hopes.

In the UK, the newly-created Office for Budget Responsibility (OBR) surprised traders by presenting a better-than-expected assessment of UK public finances.

The OBR said borrowing would be £155bn (€186.44bn) this year - £8bn (€9.6bn) lower than in March's Budget - and £23bn (€27.66bn) lower over the five years to 2014/5.

It predicted slower growth of 2.6% in 2011 - prompting fears that deep cuts in the emergency Budget next week could plunge the UK into a double-dip recession.

The pound strengthened on the better-than-expected borrowing figure, rising by just under 1% to 1.475 against the US dollar and 1.204 on the euro.

Miners including Eurasian Natural Resources and Kazakhmys saw gains of 3% or more, leaving shares in beleaguered BP far behind.

David Jones, chief market strategist at IG Index, said of the latest sell-off: "With further news on whether the dividend is to be maintained not likely for at least a few more days, it would seem investors are losing their nerve about the potential for any short term recovery."

As well as the latest slump for BP, shares in Home Retail Group remained under pressure after last week's poor update from the owner of Argos.

JP Morgan Cazenove became the latest broker to cut its rating on the stock, causing shares to fall another 1% or 2.2p to 231.5p.

Supermarkets were also on the back foot ahead of a trading update from Tesco tomorrow. Tesco was 2.55p down at 391.65p, Sainsbury's shed 1.7p to 319.7p and Morrisons was 4p cheaper at 257.7p.

Outside the top flight, shares in Majestic Wine rose 7% or 19.5p to 292p after the retailer announced a big rise in profits and said it planned to open 12 new UK stores in the current financial year.

The biggest rise in the FTSE 250 Index came from industrial valves and controls business Weir, which jumped 12% or 115.5p to 1066p after accompanying a strong trading update with the £138m (€166m) acquisition of a Malaysian firm.

The biggest Footsie risers were Fresnillo up 51p at 1060p, Kazakhmys ahead 49p at 1183p, Anglo American up 96p at 2672.5p and InterContinental Hotels ahead 42p at 1197p.

The biggest fallers were BP down 36.45p at 355.45p, Morrisons off 4p at 257.7p, Home Retail down 2.2p at 231.5p and Tesco off 2.55p at 391.65p.