Markets: City unimpressed by euro rescue plan

By DOMINIC JEFF
Published on 06/09/2012 00:22

The London market refused to join a European share rally as some details of the European Central Bank’s plans to save the euro leaked out yesterday.

The ECB is expected to unveil an unlimited bond-buying programme today, although countries will have to meet strict criteria to qualify for support. The Bank of England’s monetary policy committee is also meeting but few expect a change in policy.

Michael Hewson at CMC Markets said: “It’s been a slightly more positive day in Europe ahead of the much anticipated ECB rate meeting.”

But with more than a tenth of stocks trading without right to their latest dividends, the FTSE 100 hit a five-week low, closing down 14.2 points at 5,657.9.

Among the ex-dividend fallers were Resolution and Kazakhmys, down 5 per cent each at 203p and 570p respectively.

Oil giant BP was lower on fears it will be unable to secure an out-of-court settlement with the US government over the Gulf of Mexico disaster. Its shares slumped 3 per cent at 423.9p after the US department of justice accused it of “gross negligence and wilful misconduct” in the Deepwater Horizon explosion that claimed 11 lives.

Rival BG Group was also lower, down 50p at 1,221p, after broker Jefferies lowered its price target for the stock from 2,000p to 1,800p.

NEW YORK: Wall Street closed little changed last night, with investors reluctant to make big bets ahead of a much-anticipated meeting of the European Central Bank, which could announce new policies to help contain the eurozone’s debt crisis.

The Dow Jones industrial average was up 11.54 points, or 0.09 per cent, to close at 13,047.48 while the broader Standard & Poor’s 500 Index closed down 1.50 points, or 0.11 per cent, at 1,403.44. The Nasdaq Composite Index ended the day down 7.27 points, or 0.24 per cent, at 3,067.79.