Investors turned their backs on BP today again, although it was on the credit markets that the oil producer was really hammered.
The cost to insure $10m (£6.8m) of BP bonds soared to $230,000, or $62,000 more than yesterday, according to data from Markit. This is not far off the $270,000 that it costs to insure the sovereign debt of Spain, one of Europe's most troubled economies with its ballooning budget deficit and high unemployment.
"The market is saying that BP bonds are riskier, and that the costs related to the catastrophe in the Gulf of Mexico are escalating," said Gavan Nolan, a credit market analyst at Markit. "The more this leak goes on, the costs will go up, and regulation may also make future exploration more expensive."
BP shares fell another 2.2% to 420.3p, after plunging 13% yesterday when the oil group failed to contain the Gulf of Mexico oil leak.
BP's sliding share price helped drag the FTSE 100 index 40 points lower by midday, to 5122, a fall of almost 1%. However, much of the FTSE's decline was due to several leading companies going ex-dividend, including National Grid, down 4% at 482.1p; Vodafone, 3% lower at 134.2p; and Marks & Spencer, 2.6% off at 347.2p.
Prudential was also among the biggest FTSE losers, giving up around half of Tuesday's gains with a fall of 16p to 559.5p.
