FTSE flat as BP gains but banks weigh

Shares were flat in morning deals as investors remain nervous about the state of the global economy ahead of Friday's US jobs data.  

The FTSE 100 was up 6 points at 5052, having fallen nearly 4% last week after a mixed performance in the US on Friday after the final version of the financial regulation bill was not as bad as feared.

The main US index, the DJIA, had dropped 8.99 points, or 0.09%, at 10,143.81 but the wider S&P 500 eked out a 3.07 gain - up 0.29% at £10.76.

Eyes are now on non-farm payrolls data on Friday as disappointing numbers last month led to the recent wave of uncertainty about the pace of the US recovery.

The Nikkei closed down 43.54 points, or 0.45%, at 9693.94 after disappointing retail sales.

Standard Chartered led the fallers in London on Monday morning, down 2.81% at £16.93 after the group issued a trading update that failed to live up to expectations. That also weighed on HSBC, down 0.9p at 640.9p.

RBS was 1.17% lower at 43.91 as investors weighed less stringent global regulation against a report in the Observer that the government is set to impose new lending requirements.

Lloyds was 0.06p higher at 54.26p as Nomura analyst Robert Law upgraded the group to 'buy'.

'Banks are likely to continue to be geared towards perceptions of economic recovery. Downside in UK banks appears to require a double-dip scenario.'

BP is once again attempting to stage a recovery as some investors now hope all bad news is in the price and look for some better news at the group's quarterly results at the end of July.

A joint statement from Barack Obama and David Cameron saying the oil giant must not be allowed to implode after the wake of the Gulf of Mexico oil spill disaster, spurring hopes that punitive damages from the US may be more manageable than feared.

Shares were up 3.28% at 314.3p - having fallen 50% since the disaster at its Deepwater Horizon well at the end of April.