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BP in deep water with US courts

BP take the shine off an otherwise bullish-looking FTSE 100, partially negating the boost delivered from the European Central Bank.

BP logo
Source: Bloomberg

FTSE suffers as BP shares drop 4%

Any chance the FTSE 100 had of closing above the 6900 level has been dealt a blow this afternoon, as BP shares instantly dropped by 4% following the news that US courts have found the company to be 'grossly negligent' in its Deepwater Horizon operations. This has opened the possibility that previous fines the company has paid could now be quadrupled.

Following an agreement to sell its Canadian operations for £2.2 billion, Standard Life has confirmed it will pass on £1.75 billion to its shareholders. This reward, to an investor base worried over the company’s location in Edinburgh but a client base primarily based south of the border, saw shares jump by more than 10% in early trading.

Hargreaves Lansdown has seen the benefits of new accounts, derived from the Royal Mail IPO, begin to dwindle. Worries over its new pricing structure, announced yesterday, have continued to unnerve investors, pushing shares down a further 3% today.

easyJet passenger numbers continued to climb, up by 8.4% in August, even with the renewed competition coming from its more customer-friendly Irish competitor.   

S&P 500 could set higher-high

In a break from tradition the US equity markets have been dragged higher by their overly buoyant European counterparts. Straddling the US markets open we have had a number of economic data releases for the US, most of which passed under the radar. The slightly higher-than-expected unemployment claims have been offset by the better-than-expected US trade balance results.

Uninhibited by the normal pessimism out of Europe, both the S&P 500 and the Dow Jones look likely to flirt with setting higher-highs again. Although, it is worth noting that the S&P 500 will be battling against a fall in Apple. 

Oil hit once again

Copper has dropped sufficiently over the last number of days to finally tempt the buyers back in. The short-term oversold look of the metal, along with the likely boost in demand from a rejuvenated eurozone, has given traders enough of an excuse to reverse the last week's selloff. With the likelihood of US troops once more setting foot in Iraq, following the escalation of atrocities being committed by ISIS, oil has again been hit. 

GBP/USD hits seven-month lows

ECB president Mario Draghi has backed up his Jackson Hole promises with action today even though decisions were not voted through on a unanimous basis. Following today’s ECB base rate cut and the introduction of an asset-backed securities purchasing plan the EUR/USD has plummented.

The drop below almost 150 pips today has seen a break below the physiological $1.30 level. This should ensure that eurozone manufacturers have little to complain about when it comes to attractive pricing for overseas investors. Goldman Sachs's doomsday scenario for the pound should Scotland vote for independence has seen GBP/USD continue falling to hit seven-month lows.

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