FTSE CLOSE: Markets dragged lower by BP share slump and nerv

1. http://www.thisismoney.co.uk/money/markets/article-2198511/FTSE-CLOSE-Markets-dragged-lower-BP-share-slump-nerves-ahead-ECB-action.html?openGraphAuthor=%2Fhome%2Fsearch.html%3Fs%3D%26authornamef%3DThis%2BIs%2BMoney%2BReportershttp://www.thisismoney.co.uk/money/markets/article-2198511/FTSE-CLOSE-Markets-dragged-lower-BP-share-slump-nerves-ahead-ECB-action.html?openGraphAuthor=%2Fhome%2Fsearch.html%3Fs%3D%26authornamef%3DThis%2BIs%2BMoney%2BReporters

2. FTSE CLOSE: Markets dragged lower by BP share slump and nerves ahead of ECB action 17.30 (close): A slump for oil giant BP amid fears it will be unable to secure an out-of-court settlement with the US government over the Gulf of Mexico disaster dragged the London market lower today. BP slumped 3 per cent after the US Department of Justice accused it of 'gross negligence and wilful misconduct' in the Deepwater Horizon explosion that claimed 11 lives. BP denies the allegations of gross negligence and with the company being a major constituent of the FTSE 100 Index, the top flight closed down 14.2 points at 5657.9.

3. Market watch: Traders are fretting over whether the ECB will unveil a robust enough plan to help stricken eurozonemembers Meanwhile, nerves that the European Central Bank will fail to prescribe the medicine needed for the ailing eurozone on Thursday also rattled traders. But optimism was building amid reports the ECB may pledge to buy an unlimited amount of up to three-year bonds. The pound was consequently down against a more buoyant euro at 1.26, while sterling was up against the US dollar at 1.59.

4. However, Kathleen Brooks, research director at Forex, said she did not see the September meeting as a 'game changer'. She said: 'We think the most important meeting will be the October meeting, when the ECB will announce in detail its plan to purchase bonds and also, crucially, a start date for the purchases.‘ Sports Direct International has shown no signs of suffering in the economic slowdown as Team GB's success during an 'unprecedented sporting summer' helped profits rise 20.4 per cent to £211.1 million in the 13 weeks to July 29.

5. The chain, which has nearly 400 stores and has sold an array of sportswear geared towards the Games including the TeamGB kit designed by Stella McCartney, said store sales rose 19.9 per cent. Shares were 3 per cent higher, up 10p to 324p. Hargreaves Lansdown shares were 4.5p lower at 626p despite the investment funds broker reporting a 21 per cent hike in pre-tax profits to a record £152.8 million in the year to June 30. The bumper results triggered a bigger than expected dividend pay-out, ensuring founders Peter Hargreaves and Stephen Lansdown, who are still major shareholders, will receive £26.7 million and £16.7 million respectively.

6. Investors were also toasting the prospect of a surprise merger deal involving Irn-Bru maker AG Barr and Robinsons owner Britvic. Barr said the discussions were at an early stage after it approached its Essex-based rival Britvic about a potential all shares tie-up. It has already been agreed that Britvic shareholders will own 63 per cent of any new company. Shares in both companies fizzed today, with Britvic valued at £889 million after a rise of 13 per cent or 41.3p to 369.9p while AG Barr lifted 8 per cent, up 34.6p to 450.2p and valuing it at £525.7 million.

7. The biggest Footsie risers were Wolseley up 58p at 2620p, Lloyds Banking Group ahead 1p at 33.9p, Xstrata up 17.6p at 935.1p and Croda International ahead 66p at 2429p. The biggest Footsie fallers were Resolution down 14.2p at 5657.9p, BP off 11p at 203p, BG Group down 50p at 1221p and BHP Billiton off 48.5p at 1778.5p.

8. 15.30: The FTSE 100 is down 15.8 points at 5,656.2 as investors continue to speculate about what the ECB's 'grand plan' to save the euro might involve. Suggestions that it will including buying up the government bonds of troubled eurozone members Spain and Italy has sparked opposition from German politicians and the Bundesbank. Read more here on what ECB boss Mario Draghi might unveil tomorrow. The Dow Jones has moved 28.1 points higher to 13,064.1 in early trading.

9. 13.45: The FTSE 100 has slid further into the red as nervousness prevails over tomorrow's all-important European Central Bank meeting. The index was 19.1 points down at 5,652.9 in lunchtime trading, and Wall Street is also expected to dip on the open shortly. IshaqSiddiqi of ETX Capital said: 'We are seeing bullish traders enter the market in anticipation of a debt-busting plan from the ECB tomorrow – the pressure now is on MrDraghi and co to deliver – any failure to meet or exceed expectations would result in a massive correction across global equities.

10. 'Overall, today’s theme seems to be one of adopting caution until we have further clarity by policy makers.‘ Gekko Global Markets trader Anita Paluch said: "Although rumour and speculation have been rife, so far no ground-breaking conclusions have been reached and the idea that ECB may actually disappoint - as it may outline rather than state the details of the much anticipated bold bond buying plan - has begun to dawn on investors.‘ Meanwhile, investors were toasting the prospect of a surprise merger deal involving Irn-Bru maker AG Barr and Robinsons owner Britvic. Barr said the discussions were at an early stage after it approached its Essex-based rival Britvic about a potential tie-up.

11. It has already been agreed that Britvic shareholders will own 63 per cent of any new company. Britvic is valued at £890million after a rise of 12 per cent or 38.65p to 367.25p, while AG Barr is valued it at £510 million after lifting 6 per cent or 23.7p to 439.3p.

12. 11.00: BP shares have taken a battering after the U.S. accused the oil giant of 'gross negligence and wilful misconduct' related to the Gulf of Mexico disaster. The verdict of the Department of Justice, in filings disclosed by the Financial Times, is a blow to the City's hopes that BP will secure an out-of-court settlement over the 2010 accident, in which 11 people died. BP, which denies claims of gross negligence, saw its shares slump more than 3.5 per cent or 15.7p to 420.8p.

13. The fall weighed on the wider FTSE 100, which was down 8 points at 5,664. In other corporate news, Sports Direct International said an 'unprecedented sporting summer' helped sales jump 25.3 per cent and profits rise 20.4 per cent to £211.1 illion in the 13 weeks to July 29. Its shares were 4 per cent higher, up 13.6p to 327.6p. Hargreaves Lansdown shares were 1.5p higher at 632p after the investment funds broker reported a 21 per cent hike in pre-tax profits to a record £152.8million in the year to June 30.

14. The bumper results triggered a bigger than expected dividend pay-out, ensuring founders Peter Hargreaves and Stephen Lansdown, who are still major shareholders, will receive £26.7million and £16.7million respectively. Meanwhile, fears that the European Central Bank will fail to prescribe the medicine needed for the ailing eurozone on Thursday has continued to spook markets this week. 'Mario Draghi is expected to detail the central banks plans to buy stressed sovereign bonds to help lower the yields of Italian and Spanish bonds,' said Joshua Raymond, chief market strategist at City Index.

15. 'Much of the near term sentiment in the market very much hinges on tomorrows announcement (or potential lack of announcement) from MrDraghi and so to that end, there is an air of trepidation in the markets. 'Yesterday’s session saw indices sell off on the back of surprisingly weak US data but in truth, this merely gave investors the excuse to downsize risk ahead of tomorrow’s ECB decision and U.S. non-farm payrolls [monthly jobs report] release on Friday.'

16. 8.30: The FTSE 100 has opened down 11.6 points at 5,660.5 as investors trim expectations of imminent central bank intervention in Europe and brace for another batch of weak economic data. Poor U.S. manufacturing figures weighed on sentiment in the last session, and added to trader nervousness in the run-up to a crunch European Central Bank meeting tomorrow. The bank's president Mario Draghi is expected to shed light on plans to tame borrowing costs in troubled eurozone states like Spain and Italy, but he may stop short of announcing outright government bond purchases.

17. Stocks going ex-dividend - which means investors no longer qualify for the latest dividend payout - will take a hefty 6.68 points off the FTSE 100 today after the resulting adjustment to prices. Aggreko, ARM Holdings, BHP Billiton, Diageo , Evraz, IMI, Kazakhmys, Resolution, Serco, Shire, and Tullow Oil will all be trading without their dividend attractions.

18. Stocks to watch today include: BP: The U.S. Justice Department is ramping up its rhetoric against BP for the massive 2010 oil spill in the Gulf of Mexico, describing in new court papers examples of what it calls 'gross negligence and willful misconduct'. Barclays: The fallout from an investigation into the attempted manipulation of global benchmark interest rates has again rocked Barclays. The bank recently ousted a top executive and a trader in New York for their roles in the scandal, according to regulatory filings. Hargreaves Lansdown: The investment manager outpaced the impact on investor confidence of weak stock markets and bad economic news to post double digit increases in full-year revenues and profits. It rewarded investors with a special dividend.

19. Berkeley Group: The housebuilder said trading for the first-quarter has been in line with the board's expectations. Sports Direct: The retailer said total sales for the 13 weeks ending July 29 were up 25.3 per cent to £519million, with gross profit up 20.4 per cent to £211.1million. Since the end of July, trading has remained equally strong. Theo Fennell: The upmarket jeweller said it is in very preliminary talks with EME Capital, which may or may not lead to an offer for the company.

20. Advanced Medical Solutions: The group reported a 98 per cent jump in first-half adjusted profit before tax to £5.4million on revenue up 52 per cent to £24.8million. It said it was optimistic about long term prospects. EKF Diagnostics: The firm said its adjusted profit for the first-half is expected to be well ahead of market expectations, and it has confidence that it will at least meet or exceed current earnings expectations for the full year. Shanta Gold: The firm revealed encouraging exploration results from its GBG joint venture. Britvic: Shares in the soft drinks firm rose yesterday as mouthwatering rumours of a £1.3billion merger with Iron-Bru-to-Tizer group AG Barr intensified, according to the Daily Mail market report.