London’s blue chips were showing a triple–digit drop as BP unveiled a huge loss raising doubts about its dividend.
FTSE 100 shed 105 points to 5,954 as investors tried to get their head around the oil major's (LON:BP.) numbers.
US markets were also heading for a large fall when Wall Street gets underway according to spread bet firms.
Analysts said it was the company’s worst loss for 20 years. BP announced 7,000 job cuts and took a raft of write-downs including on its assets in the North Sea.
Lower oil and gas prices are took a heavy toll on the production arm, which reported a pre-tax loss for the quarter,
That its dividend was left intact was one consolation, but BP shares now yield 9% a sure sign the market thinks that may not be the case for long said commentators.
Shares fell 8.7% to 335p, while Shell fell 64p at 1,436p.
Sainsbury’s (LON:SBRY) has a better day as the market liked the deal to buy Argos owner Home Retail (LON:HOME) for about £1.3bn.
The supermarket chain and Home Retail shook on 0.321 new Sainsbury shares plus 55p in cash for each Home Retail share. With a few other embellishments, the deal is worth 161.3p per share.
Sainsbury’s jumped 1.1% to 251.3p on a tough day as the market decided it had not overpayed. Home Retail eased to 152.3p.
Other big cap movers included miner BHP Billiton (LON:BLT) after a ratings downgrade by Standard & Poors, which knocked onto others in the sector. BHP slumped 7% to 629.8p, while rival Rio (LON:RIO) tumbled 5.4% to 1,605p.
Vodafone (LON:VOD) was another faller on disappointment a deal with US giant Liberty Global amounted to nothing more than a joint venture in the Netherlands. Shares in the group eased 1% to 222.8p.
Hikma Pharmaceutical (LON:HIK) was the best of the blue chip risers as Bank of America Merrill Lynch turned buyer. Shares rose 2.7% to 2,084p.
Elsewhere, TalkTalk (LON:TALK) rose 4.5% to 228p on a good looking set of underlying numbers, a higher dividend and forecast of much better times ahead. Statutory results were affected by the well-publicised cyber attack last year.
Oiler Gulf Keystone (LON:GKP) made more strong gains following changes to the payment terms in Kurdistan yesterday. GKP shares jumped 19% to 17.3p.
A funding for Zincox (LON:ZOX) sent the zinc recycling specialist up by 63% to 0.9p. The shares were issued at a premium and it gives some breathing space for the company as it tried to find a new business now that it has handed its recycling plant in Korea over to its partner.
Ceres Power (LON:CWR) climbed 7.5% to 7.31p as another large manufacturer, albeit unnamed, agreed to trial its fuel cell technology.
Junior gold miner Hummingbird (LON:HUMM) rose 3% to 15.15p on a potential resource expansion at its Yanfolila gold project in Mali.