By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- BP PLC shares logged their largest
decline in more than four years Thursday, blunting a gain for the
FTSE 100 benchmark, following an unfavorable court ruling against
the company over a 2010 oil spill in the Gulf of Mexico.
BP (BP) dropped 5.9%, the sharpest fall since June 2010,
according to FactSet data, after a federal judge in New Orleans
found the British oil giant was grossly negligent and acted with
willful misconduct in the Deepwater Horizon disaster. The decision
means BP could pay as much as $4,300 for each barrel of oil that
was spilled following the April 2010 rig explosion, meaning BP
could pay civil penalties of up to $18 billion.
U.S. District Judge Carl Barbier, citing precedent, concluded
that BP wasn't liable for punitive damages. The rig explosion
killed 11 workers and set off the worst offshore oil spill in U.S.
history.
BP's tumble weighed on the FTSE 100 , which had been higher
after the Bank of England held its key interest rate unchanged, a
move markets expected.
Markets: The FTSE 100 closed up 0.1% at 6,877.97. The pound
(GBPUSD) fell against the U.S. dollar to $1.6366 compared with
$1.6448 ahead of the central bank's decision.
Standard Life held to the top advancing spot on the FTSE 100.
Shares of Scotland's largest insurer rallied 8.1% on the company's
plan to return 1.75 billion pounds ($2.88 billion) to investors.
The move stemmed from plans by the insurer to sell its Canadian
assets to Manulife Financial .
Bank of England: The Bank of England held the size of its 375
billion pounds ($617 billion) bond-buying program steady, and left
its key lending rate at a record low of 0.5%, meeting market
expectations. Policy makers were expected to keep the rate
unchanged as wage growth in the U.K. remains weak and overall
growth shows signs of slowing. Minutes from the September meeting
will be released Sept. 17.
In August, two rate-board members voted for a rate increase,
marking the first time since 2011 that any member voted in favor of
raising rates.
Comment: The Monetary Policy Committee has been "unwavering in
its assessment that any increase in interest rates is only likely
to be gradual, but a number of question marks surround the timing
of the first move," said Philip Shaw, chief economist at Investec
Securities, in a note.
Incoming data and the impact of economic problems in the
eurozone on the U.K. economy are among the factors the central bank
will consider in making its rate decision. Although the timing of a
BOE rate hike remains "very uncertain, we are for now staying with
a November hike," said Shaw.
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