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May 20, 2011    

BP gains on settlement related to Gulf oil spill

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by Elaine Frei
BP gains on settlement related to Gulf oil spill

European markets were lower Friday, with declines coming as carmakers declined and on continuing concerns that Greece will have to restructure its debt as 10-year bond yields there hit a record high.

London’s markets were mixed as the FTSE 100 dropped 0.13 percent to 5,948.49 but the FTSE 250 added 0.05 percent to 11,992.2, with the energy sector in focus.

Oil and gas explorer BP (LSE: BP) added 2.7 percent to lead gains in the sector after receiving a $1.07 billion settlement from MOEX Offshore 2007, a unit of trader Mitsui & Co (TYO: 8031), related to the oil spill last year in the Gulf of Mexico, with analysts taking the settlement as an indication that MOEX does not believe it can establish that actions by BP were the cause of the explosion that caused the spill.

Additionally, Investec upped its recommendation on BP fro “hold” to “buy”, while the rest of the energy sector was mixed as AMEC (LSE: AMEC), which provides engineering services to oil companies, dropped 1.1 percent as the worst performer in the sector.

The travel and leisure sector was mixed, with pubs and restaurants operator Mitchells & Butlers (LSE: MAB) down 5.17 percent to lead declines in sector and on the 250, while miners, insurers, the media sector, utilities and the real estate sector were all mixed, and the food and beverage sector was mixed with more decliners than gainers although Associated British Foods (LSE: ABF) led gains on the 100 as it added 3.12 percent.

Banks and the health care sector were mostly lower, but the telecommunications and retail sectors were mostly higher.

The FTSE Eurofirst 300 was down 0.23 percent to 1,136.03 while the CAC-40 fell 0.92 percent to 3,990.85, the Dax was 1.24 percent lower to 7,266.82 and the IBEX dropped 1.45 percent to 10,226.6.

Markets in the Asia-Pacific were mixed Friday.

The Nikkei 225 was down 0.14 percent to 9,607.08 in Tokyo, while the Topix index dropped 0.5 percent but the Mothers market added 0.35 percent to 456.57 the Bank of Japan held interest rates steady even though new data showed that the Japanese economy has slipped into recession.

Utilities were in focus yet again as Tokyo Electric Power (TYO: 9501) announced that its president will resign, although it ended up 2.5 percent after going as low as 8.9 percent during the session, while Chubu Electric Power (TYO: 9502) dropped 4.7 percent and Kansai Electric Power (TYO: 9503) was down 4.9 percent.

After the close of trade, Tepco announced a full-year loss that was the biggest for a Japanese company in eight years, while commodities-related shares such as oil companies and traders, were lower on declines in commodities prices in London and New York on Thursday, but exporters, including the electronics sector, saw gains as the yen weakened.

Other markets seeing declines included the Shanghai Composite, which was down 0.04 percent to 2,858.46, while the Straits Times Index fell 0.13 percent to 3,168.54, Australia’s markets were lower as the Sydney Ordinaries dropped 0.42 percent to 4,807.7 and the S&P/ASX200 was down 0.51 percent to 4,732.2, and Taiwan’s Taiex was 0.63 percent lower to 8,837.03.

The Hang Seng added 0.16 percent to 23,199.4 even though property developers declined as high prices made property there unaffordable for many people, while the Kospi was up 0.76 percent to 2,111.5 in South Korea and India’s Sensex gained 1.02 percent to 18,326.54.

Wall Street was lower in midday trade in New York as investors worried about Greece’s debt crisis and after some retailers saw declines, with the Dow Jones Industrial Average down 0.23 percent to 12,576.7 while the S&P 500 had dropped 0.26 percent to 1,340.12 and the Nasdaq Composite was 0.29 percent lower to 2,815.16.

Clothing retailer The Gap Inc (NYSE: GPS) dropped 17 percent in midday trade on sluggish sales, although bookseller Barnes & Noble (NYSE: BKS) added 30 percent on an offer.

Crude oil prices were higher, with West Texas Intermediate crude up nearly 96 cents to $99.40 per barrel and Brent crude added $1.01 to $112.43 per barrel, while metals prices also climbed, with gold up $20.40 to $1,512.80 per troy ounce.

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