FTSE declines as BP faces criminal probe and Japanese PM resigns

The FTSE 100 looks set to mount further losses today after investor concerns over the global economic situation worsened following announcements that Japanese Prime Minister Yukio Hatoyama is set to resign and under-fire oil giant BP (LON:BP) faces criminal as well as civil investigations from the US Government.

Rob Hull
shareprices.com - Wednesday, June 02, 2010

Printable version email to a friend Subscribe to shareprices.com newsfeed
Japanese Prime Minister Yukio Hatoyama has resigned

Hatoyama’s announcement earlier today has abetted the news from yesterday about manufacturing growth in China slowing to raise fears amongst investors that two of the economic powerhouses are feeling the effects of the European debt crisis, causing a commodity-stock sell-off.

The Japanese Prime Minister has faced tough criticism for his leadership since taking the position last September after failing to deliver on a campaign promise to move a major U.S military base off Okinawa’s main island. He will stand down from the position in the next two months.

Commodity prices have still been reeling from BP’s record daily loss of 13 per cent yesterday – the biggest share price fall in one session for the group for 18 years – and have taken another blown from the news released earlier today in Japan.

And the U.S Government could potentially land BP and CEO Tony Hayward a knockout blow after it opened a criminal investigation into the firm over the oil spill in the Gulf of Mexico that BP has failed to stop and has gone onto becoming the biggest oil disaster in American history.

US Attorney General Eric Holder announced the investigation, conducted with the insight of the FBI, last night, saying: “We will closely examine the actions of those involved in the spill.

“If we find evidence of illegal behaviour, we will be extremely forceful in our response.”

Share in BP have tumbled another 3.5 per cent already this morning, taking the week’s tumble to a total of over 16 per cent with a loss of 80p.

BP’s competition, Royal Dutch Shell (LON:RDSA), has also felt the effect of the spill and is currently down over two per cent at 10:00BST. And commodity stocks, including miners, are also feeling the brunt of the combined news of the probe into BP and the resignation of the Japanese PM.

Xstrata (LON:XTA), Rio Tinto (LON:RIO) and Vendanta Resources (LON:VED) are the biggest dropping mining stocks losing in excess of two per cent and oil exploration and extraction group Cain Energy (LON:CNE) is also two per cent down at 10:00BST.

The banking sector is also playing its part in pulling the FTSE further down as it continues to battle against massive investor fears about bad loan pay-offs in the region of £100bn this year and another £90bn in 2011.

RBS (LON:RBS), Lloyds Banking Group (LON:LLOY) and Barclays (LON:BARC) are all amongst the top fallers of the day so far on the UK’s top index with RBS losing over three per cent and Lloyds and Barclays dropping more than two per cent.

The two heaviest falling stocks on the FTSE 100 this morning are Marks & Spencer Group (LON:MKS) and National Grid (LON:NG) after both groups moved ex-dividend down 3.06 per cent and 3.46 per cent respectively putting both over three per cent down.

At 10:00BST, the FTSE 100 index is down 1.5 per cent, falling to 5084.74 points.

 

Latest News

Related News

FTSE 100 Latest

ValueChange
5,875.9314.33  % fall