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FTSE spirals; BP falls on Deepwater ruling
British and European markets go into reverse as inconclusive Greek debt talks drag the mood down.
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Britain’s FTSE 100 ended the week on a sour note in Friday trade as decisive action on the Greek bond dilemma failed to materialise.
The benchmark UK index of blue-chip shares dropped 1.07%, or 61 points, to 5,734 and the Mid-250 index lost 0.5%, or 54 points, to 10,855.
Despite the poor performance, the FTSE 100 closed the week up, adding five points, and the Mid-250 rose 29 points.
Citywire Top Stock® BP (BP.L) fell back 12.2p, or 2.6%, to 465p as the oil giant lost its bid to foist $15 billion of the clean-up costs for the Deepwater Horizon oil spill onto drilling partner Transocean.
Following the court’s decision, Transocean shares rose for the first time in five months on the Zurich stock exchange. See the FTSE’s performance and the index’s top winners and losers.
Investors show no confidence in eurozone promises
In Davos eurozone finance officials were adamant that a deal to stop a Greek default was nearing. However, markets weren’t convinced, and continued their retreat to close down on the day.
Michael Hewson, analyst at CMC Markets, said: ‘European markets have slipped back heading into the weekend with the same concerns hanging over them as last week, namely a resolution to the Greece debt restructuring talks.
'There is also rising concern about the state of Portugal’s finances as its bond yields blow out towards 15% and the yield curve inverts on fears that it could well go the same way as Greece, and need some form of debt restructuring,’ he added.
Poor figures from the US and Europe saw markets remain low in Friday trade.
Spanish unemployment passed 5 million in the last quarter of 2011, the highest rate of unemployment in 17 years.
Other stock markets in Europe fell back: Germany’s DAX index lost 0.43% to 6,512, France's CAC 40 index fell 1.32% to 3,319, and the FTSEurofirst 300 index of top European shares dropped 0.96% to 1,042.
US gross domestic product (GDP) increased from 1.3% to 2.5% in the last quarter of 2011, but the reading caused concern that growth will slow this year as demand for goods weakens.
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9 comments so far. Why not have your say?
Keith Snell
Jan 27, 2012 at 18:27
Presumably the eorozone leaders and those expecting Greece to agree to terms that would only put off the day of default remain in cloud cuckoo land, now firmly in EU territory.
report thisFranco
Jan 27, 2012 at 18:56
Greece should default and tell the bankers, including our own bonus-gorged pigs who are holding its debt, go to hell. Investing carries risks.
And we should not be feeling holier that thou because we too are defaulting by 5% per year with inflation.
report thisFranco
Jan 27, 2012 at 18:56
Greece should default and tell the bankers, including our own bonus-gorged pigs who are holding its debt, go to hell. Investing carries risks.
And we should not be feeling holier that thou because we too are defaulting by 5% per year with inflation.
report thisseahound
Jan 27, 2012 at 19:13
Franco the problem is that German banks are heavily exposed to Greek debt.
If Greece defaults & brings the German banking system down then its time to head for the hills.Things will get very unpleasant indeed.
report thisRaymond Hurley
Jan 27, 2012 at 21:23
Another example of the poor standard of journalism so typical of City Wire.
Does Caelainn Barr understand the meaning of the word 'foist'.
In the case of the 'Deep Water Horizon' disaster,BP has a duty both to it's shareholders, and the public at large, to establish truth in this matter.
The actions of BP and it's CEO at the time of ther disaster, are a marked contrast to that of the American owners of the Costa Concordia.
report thisJ Reid
Jan 28, 2012 at 10:36
Well said Raymond Hurley, a few more references to 'The American owned Company Costa Concordia' in the style of Obama and his British bashing during Deepwater might put the frits up some would be cruisers.
report thisAndrew Cleverley
Jan 28, 2012 at 12:45
.
Does Caelainn Barr understand the meaning of the word 'foist'.
FOIST
Impose an unwelcome or unnecessary person or thing on: "don't let anyone foist inferior goods on you".
And your point was....?
report thisRaymond Hurley
Jan 28, 2012 at 15:14
The word 'foist', implies that somehow, the actions of BP are unjustified.
BP has every right to try and recover costs from the two American sub contractors, that have so far attempted to evade their share of responsibility for the disaster.
BP met all of it's obligations.This stands in stark contrast to the behaviour of both Transocean and Haliburton.
report thisorchardsparks
Jan 28, 2012 at 15:52
seahound
You have the nub of the problem but, as Liam Halligan has repeated almost ad nauseam "Until the banks fess up to their indebtedness" these problems won't be resolved. This begs the question as to just how big such indebtedness is. At present everyone seems to be putting off the evil day.
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