Posted on 06/01/2010 5:24:54 AM PDT by blam
FTSE Hit By BP Spill Failure, Euro Zone Growth Fears
By David Brett
Tue Jun 1, 2010 7:22am EDT
* FTSE drops 2.1 percent
* BP slumps as "top kill" fails; crude down 2.6 percent
* Prudential up; AIG snubs revised offer for AIA
LONDON, June 1 (Reuters) - Britain's top shares were down heavily by midday on Tuesday, as BP (BP.L) plunged 15 percent after it failed to stem the major oil spill in the Gulf of Mexico and euro zone growth fears weighed on sentiment.
By 1108 GMT, the FTSE 100 .FTSE was down 107.17 points or 2.1 percent at 5,081.26.
BP, which has had 44 billion pounds ($63.9 billion) wiped off its value since April 20, accounted for around half of the blue-chip index's decline after the oil major said its latest attempt to plug or contain the gushing oil well had failed.
BP's failure, and a 2.6 percent drop in the crude price CLC1 dented sector sentiment, with Royal Dutch Shell (RDSa.L) down 1.9 percent, and oil explorers Tullow Oil (TLW.L) and Cairn (CNE.L) off 1.7 and 1.8 percent respectively.
The slide on the blue-chip index added to May's 6.6 percent fall, its biggest monthly drop since March 2009, on mounting fears about Europe's huge debt problems and worries about the impact of austerity measures.
"Growth concerns, on top of BP's woes, are again haunting investors," Jimmy Yates, head of equities at CMC Markets.
British manufacturing activity held steady in May at the previous month's 15-year high, but the recovery picture was clouded by signs of accelerating price pressures.
"Downbeat comments from the euro zone and China have raised doubts about the pace of the economic recovery," Yates added.
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(Excerpt) Read more at reuters.com ...
BP shells out $10B in dividends annually. Even halving the dividend should cover the damages over the next few years.
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