Winning run ends as BP shares suffer late sell-off

The London market's run of seven sessions in positive territory ended yesterday after a late reversal for shares in under-pressure oil giant BP.

The FTSE 100 Index was on its longest winning streak since last July but closed 3.05 points down at 5250.84 after surrendering earlier gains.

Chief executive Tony Hayward's mauling at the hands of US politicians had little bearing on BP, which was higher for most of the session until a ratings downgrade from Moody's caused a late sell-off that left the blue-chip stock 21/4p lower to stand at 3571/2p.

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BP added 7 per cent on Thursday after the firm axed its dividend and set up a 20 billion dollar (13.5bn) compensation fund as part of attempts to deal with the aftermath of the Gulf of Mexico oil disaster.

The rest of the London market was in lacklustre mood due to an absence of significant corporate news throughout the day.

Fresh from Thursday's strong UK retail sales figures, sterling was offered further support when public finances data showed a lower-than-expected borrowing figure of 16bn for May.

The pound was flat against the dollar at 1.48 and slightly higher against the euro following the latest economic figures.

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Despite the renewed appetite for risk, gold remained an attractive asset as the price of the traditional safe haven climbed to another new high of around 1,260 US dollars an ounce.

The precious metal has risen nearly 15 per cent since the end of 2009, fuelled by sovereign risk in the euro zone, historically low interest rates, and concern over the stability of paper currencies.

"Sovereign debt worries, central banks raising their holdings and record low interest rates keep attracting new buyers to gold," said Saxo Bank senior manager Ole Hansen.

"The Goldilocks scenario continues. Risk-off helps gold through safe haven (buying), risk-on helps it as well through a weaker dollar."

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This was reflected in the performance of African gold mining firm Randgold Resources, which closed 180p higher to 6430p.

Banks experienced a mixed session as relief that Chancellor George Osborne's Mansion House speech was less severe on the industry than some had expected started to fade.

Lloyds Banking Group was down 7/8p to 563/8p while HSBC dropped 1/4p to 6485/8p and Barclays slipped 1/4p to 3123/8p after a stronger start.

Retail stocks continued to rally after decent weekly figures from John Lewis suggested firms were enjoying a better-than-expected summer, particularly due to the sales lift caused by the World Cup.

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Marks & Spencer was 65/8p higher at 3515/8p and Next lifted 20p to 2150p, while B&Q owner Kingfisher cheered 6p to 2293/4p.

Sainsbury's rose 51/4p to 3313/4p but Tesco was down 65/8p to 3903/4p as it prepared for a

difficult annual meeting next month due to shareholder anger over the pay packet of its US boss Tim Mason.

BT Group shares were down 23/4p to 1363/4p as the Communication Workers Union warned that it was prepared to hold a protracted strike at BT in order to secure an improved pay offer for its members.

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It sent out ballot forms yesterday ahead of what could be the company's first bout of industrial action for 23 years.

The biggest Footsie risers were Fresnillo up 35p to 1060p, Randgold Resources, Kingfisher and Cairn Energy ahead 111/8p to 4355/8p.

The biggest fallers were BT Group, Capita Group off 131/2p to 786p, Tesco and GlaxoSmithKline off 19p to close at 1196p.