Morning Market: BP shares savaged again

A fresh fall in BP shares as the burgeoning cost of the oil spill reinforced fears of a dividend cut and caution ahead of interest rates decisions by the Bank of England and European Central Bank make for another jittery start to trading in London.

By 8.30am the FTSE 100 index was down 36 points at 5,049 with a hefty 8% (or 31p) drop in BP to 360p dominating the proceedings. The Mid-250 index was 63 points adrift at 9,424.

Home Retail was another prominent weak spot at 226.5p, down 11.5p, as Argos was hit by weak gaming and TV sales.

Other retailers turned easier in sympathy with Next 36p lower at £20.50, Game Group off 3.75p at 86.3p and Kingfisher down 3p at 215p.

However solid results and expansion prospects at Halfords lifted the shares 10p to 510p

Banks remained under a cloud amid regulatory and eurozone bad debt concerns, with RBS off 0.82p to 41.26p and Lloyds 0.88p easier at 52.58p.

'Safe haven' sectors returned to prominence as investors switched out of the riskier sectors.

Utilities attracted support under the lead of National Grid at 487.4p, up 3.20p and Severn Trent, 4p better at £12.33.

Among the Mid-Caps Premier Farnell shone at 238p, up 18p on revealing better-than-expected profits, lending support to rival Electrocomponents, 3p firmer at 214p.

Takeover rumours stimulated interest in Brewin Dolphin at 130p, up 4p, but UK Coal dipped 2p to 40.25p as Hargreaves Services pulled out of talks.

Trinity Mirror remained off colour at 81.15p, down 5.25p.

Among the smaller caps Portrait Software jumped 6.5p to 28.5p in response to the £44 million bid from Pitney Bowes and Chapelthorpe picked up 2p to 26p as it swung back into full-year operating profits.