Britain’s FTSE 100 in retreat; BP banks slip

* FTSE 100 down 0.7 percent

* Banks retreat after sharp falls last week

* Energy stocks hit by BP oil spill

By Simon Falush

LONDON, May 24 (BestGrowthStock) – Britain’s top share index fell by
midsession on Monday, down for a fourth day as BP (BP.L: ) dragged
energy stocks down and banks were hurt by continued concern
about the euro zone debt crisis.

By 1032 GMT the FTSE 100 (.FTSE: ) was 36.49 points or 0.7
percent lower at 5,026.44 after it ended 0.2 percent lower on
Friday, having fallen below 5,000 for the first time since

Banks, which saw some of the heaviest losses last week, were
again under pressure after the Bank of Spain took control of
savings bank CajaSur, snuffing out hopes that the euro zone debt
crisis was at last being tackled.

Royal Bank of Scotland (RBS.L: ), Barclays (BARC.L: ), HSBC
(HSBA.L: ), Royal Bank of Scotland (RBS.L: ) and Lloyds Banking
Group (LLOY.L: ) fell 0.4 to 2.2 percent.

“It’s a continuation of the problems we saw last week,” said
David Jones, chief market strategist at IG Index. “There’s
nervousness on euro zone debt problems, and the Spanish bank’s
woes are just adding to this.”

The FTSE 100 is still down more than 13 percent since fears
escalated about the euro zone sovereign debt crisis in
mid-April, and is down 7.1 percent so far this year after a 22
percent gain in 2009.


Energy stocks were in retreat (CLc1: ) as an oil spill in the
Gulf of Mexico soured sentiment towards the sector.

BP was down 3.5 percent after U.S. President Barack Obama
dispatched two Cabinet secretaries to the fouled Gulf Coast on
Monday to keep pressure on the oil major to plug an undersea oil
leak that threatens an ecological disaster.

BP said the oil it is siphoning off from a ruptured well in
the Gulf of Mexico was on average less than half its estimate
for the amount leaking each day and well below previous rates.

Shares in BP have fallen more than 15 percent in May, on
track for its biggest monthly loss since 1992.

Peer Royal Dutch Shell (RDSa.L: ) fell 2 percent while Cairn
Energy was down 3.5 percent.

British finance minister George Osborne and Treasury
minister David Laws outlined plans to cut 6.25 billion pounds of
government spending on Monday.

This pressured shares in Capita (CPI.L: ) and Serco Group
(SRP.L: ), off 2.2 and 0.8 percent respectively as investors
worried about the UK government renegotiating terms of
government contracts.

Travel firms Thomas Cook (TCG.L: ) and Tui Travel (TT.L: )
gained 0.2 and 1.1 percent respectively with traders saying that
they are benefiting from the chaos caused by striking staff at
British Airways (BAY.L: ), as travellers are forced to make
alternative plans.

British Airways managed to climb 0.2 percent, even as its
cabin crew began a new strike after weekend talks to try to
resolve a long-running dispute over wages, job cuts and working
conditions broke down in acrimony.

Imperial Tobacco (IMT.L: ), supermarket group Sainsbury
(SBRY.L: ) and consumer goods company Reckitt Benckiser were also
among the gainers, up 1.7-2.1 percent as investors looked to
shelter in defensively perceived stocks.

Latest wrapup on the euro zone debt crisis: [ID:nLDE64N05B]
Graphic on the euro zone debt:
For related news stories: [ID:nLDE64I0RB]

stock market
(Editing by Jon Loades-Carter)

Britain’s FTSE 100 in retreat; BP banks slip