FTSE reverses into the red on BP share price plunge

BP suffered a 17 per cent slide at one stage in its biggest one-day

shares fall for 18 years, before closing down 13 per cent.

Around 12bn was wiped off the company's shares in the sell-off, which dragged the Footsie lower – down 25.13 points at 5163.30.

BP's nosedive was sparked by news that its latest attempt to "top kill" the leaking oil well had not worked.

The blue chip heavyweight accounts for seven per cent of the FTSE 100 Index and its woes punished the wider market.

But the top tier pulled back from early session falls of more than 100 points thanks to more positive trading on Wall Street.

US stocks were boosted by good news from the construction and manufacturing sectors, which raised hopes for economic recovery in the United States.

Gains were much needed on the Dow Jones Industrial Average after it suffered the worst May since 1962, retreating 7.9 per cent due to anxiety over the

eurozone.

In currency news, yesterday's better sentiment helped the euro, which clawed its way back from a fresh four-year low against the dollar, trading at around 1.23 dollars.

The pound also gained strength against the dollar and was up on the euro, at 1.20 euros.

Mining stocks were impacted by signs of cooling growth in China, with Kazakhmys down 19p to 1166p and BHP Billiton off 381/2p to close the session

at 18741/2p.

Embattled BP led the Footsie fallers, down 64.8p to close at 430p with investors fearing the oil spill crisis will not be stopped until August. Shares have lost a third of their value since the crisis began and one analyst at Arbuthnot said the leak had the potential to "break BP" if the well was not stopped soon and the US government were to take tough action.

Later in the day United States President Barack Obama promised that if laws were broken in the devastating oil spill, those responsible would be brought to justice. Mr Obama, speaking in the Rose Garden at the White House, also said BP would be held accountable for financial losses from what he called the "greatest environmental disaster of its kind in our history."

"What is being threatened, what is being lost, isn't just a source of income but a way of life," Mr Obama said.

The spill began following an explosion on the drilling rig Deepwater Horizon.

Fellow oil giant Royal Dutch Shell also saw its shares dented as investors worried over new drilling regulations that are likely to emerge following the Deepwater Horizon disaster. Shares fell 101/2p to 1741p.

Prudential was the biggest riser in the FTSE 100 Index amid signs that its takeover pursuit of AIG's Asian arm AIA may have failed.

Shareholders, who criticised the deal as too expensive, saw the stock rise six per cent or 331/4p to 5751/2p.

Elsewhere Irish carrier Ryanair advanced eight per cent after the group swung back into profit on lower fuel prices and announced a special 500m euro dividend (422m).

In the FTSE 250, rival easyJet added three per cent or 11.7p to 412.7p.

The four biggest Footsie risers were Prudential up 34p at 5751/2p, British American Tobacco ahead 721/2p at 2115p, Legal & General up 2.8p at 81.9p and Rangold Resources ahead 205p at 6195p.

The biggest Footsie fallers were BP down 64.8p at 430p, TUI Travel off 4.8p at 232.9p, BHP Billiton down 381/2p at 18741/2p and Kazakhmys off 19p at 1166p.