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BP deal fails to lift gloom on Footsie

Oil giant BP was in the spotlight on the London market as it agreed a record £2.8 billion settlement with US authorities for claims relating to the Deepwater Horizon disaster.

The group also pled guilty to 14 criminal charges, but said it hoped the deal showed it had "accepted responsibility".

Continued uncertainty over economic prospects in Europe and United States kept the FTSE-100 index under pressure, down 44.26 points at 5677.75.

Worse-than-expected jobless claims figures following the disruption caused by superstorm Sandy combined with ongoing fears that President Barak Obama will be unable to strike an agreement to avoid America's fiscal cliff on January 1.

The latest figures from Eurostat, the EU's statistics office, showed the eurozone economy contracted by 0.1% in the July to September period.

Following the 0.2% decline recorded in the second quarter, the figure officially puts the region back into recession.

Retailers suffered more big share price losses after the Office for National Statistics reported a drop of 0.8% in sales volumes for October. This was much bigger than the 0.2% decline predicted by analysts.

The data saw the pound fall to a two-week low against the euro, at €1.24, although it rose to $1.59.

The retail sales blow also triggered a fall of 2% for Marks & Spencer. Its shares dropped 7.8p to 370.6p, while B&Q owner Kingfisher was off 7.6p to 275.4p and Sainsbury's fell 5.8p to 333p after also dropping yesterday in the wake of half-year results.

Outside the top flight. fashion brand Ted Baker bucked the gloomy trend by reporting good UK trading and continued growth in business overseas.

The shares were up 9p to 970p in the wake of the update, which showed it increased sales by 22.1% year-on-year in the 13 weeks to November 13.

BP dropped 0.4p to 425.4p after the agreement announcement just before the market close, but the stock had been higher earlier as investors saw the deal removing uncertainty hanging over the stock since the disaster.

The biggest Footsie faller was South West Water parent Pennon, down 41.5p to 628.5p, after it warned over profits at its embattled waste and recycling arm Viridor for the second time since August.

Centrica fell 1.8p to 316.5p, even though the firm said it remained on track to meet forecasts for profits of around £1.4 billion this year.

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