BP compensation battle win boosts FTSE
A LEGAL victory for BP in its fight to cap compensation claims for the Gulf of Mexico oil spill helped shares rise as leading stocks shook off fears over political deadlock in the US.
The oil major rose more than 1% or 4.8p to 437.2p after a US federal appeals court ordered tighter rules on compensation to help stem bogus or inflated c l a i ms for d a mag e s by businesses.
Upbeat figures from the powerhouse Chinese economy also helped the wider FTSE 100 Index steady after falls in the previous session, up 11.5 points to 6449.
A report showed that China’s services sector expanded to a sixmonth high in August, but markets remain cautious with no breakthrough in sight on budget negotiations and warnings from Barack Obama to Wall Street over the risk of America defaulting.
While London investors held their nerve over the crisis, Germany’s Dax and France’s Cac 40 fell, partly on profit taking as the single currency climbed against the dollar.
Worries took their toll on Wall Street, with the Dow Jones Industrial Average down by more than 1% by the close in London. Sterling failed to advance on previous highs, despite buoyant economic data showing the services sector had its best quarter for 16 years.
Surveys this week, also including construction and manufacturing figures, showed strong performances across the board, but also indicated growth slowing down a little.
It was enough for currency traders to take profits on the pound, which slipped a cent against the greenback to just under $1.62 and also by a cent against the single currency, to a little below €1.19.
In equities, insurer helped the FTSE 100 to hold its course, after it completed the sale of its US arm to Athene Holding, fetching $800 million (£493m) more than expected. Shares rose 5.6p to 413.1p.
In other corporate
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Shares initially rose as much as 2%, but later lost ground, down 6p to 1308p. Discount retailer
was among the biggest top-flight fallers after the company’s chief executive Dave Forsey and finance director Bob Mellors took up bonus scheme options to buy a million shares each, and immediately sold 950,000 each.
The move raised nearly £6.5 million each for the pair, but left shares in the group 10.5p lower at 698p.
The biggest risers on the FTSE 100 were up 48p to 2367p, up 7p to 365p, up 24.5p to 1571p and
up 1.7p to 119.9p. The biggest fallers on the FTSE 100 were down 31p to 1059p, 25p to 910p, 1466p, and 30p to 1472.5p.
down down 30p to
down THE dollar hit an eight-month low yesterday as worries grew that the budget standoff in Washington would drag on and become intertwined with the looming and more complex fight over raising the US borrowing limit.
Stock indexes fell about 1% as the partial US government shutdown entered its third day and after President Barack Obama maintained his defiant tone by reiterating in a speech he would not meet Republican demands to scroll back his healthcare reform in exchange for reopening the government.
As a result of the shutdown, the Labour Department said the government’s employment report for September will not be released as scheduled on Friday. A new release date had not yet been set.
Analysts expect investor patience to run out if the shutdown lasts more than a week as t he debt c e i l i ng deadline approaches. Treasury Secretary Jack Lew said the US will exhaust its $16.7 trillion borrowing authority no later than October 17.
Failure to raise the debt limit could damage not only the US but the rest of the global economy, International Monetary Fund chief Christine Lagarde warned.
The Dow Jones industrial average ended down 136.66 points, or 0.90%, at 14,996.48. Standard & Poor’s 500 Index fell 15.21 points, or 0.90%, to 1,678.66. The Nasdaq Composite Index dropped 40.68 points, or 1.07%, to 3,774.34.
Spot gold traded little changed $1,316 an ounce.
Oil prices fell on concern the shutdown will hurt energy demand. Brent crude was down to settle at $109.00 a barrel. US oil fell 79 cents to $103.31 a barrel.