BP shares plunge more than 10 percent in London trade
BP shares plunged more then 10 percent on Monday as investors fretted over the spiralling cost of the Gulf Mexico oil spill crisis and the future of the group's shareholder dividend, dealers said.
In late afternoon trade, BP tumbled to 351 pence amid mounting pressure from US President Barack Obama over the group's handling of the worst-ever environmental disaster in the history of the United States.
Reports have suggested that BP will bow to massive US pressure and decide to suspend dividend payments as its potential liability over the oil spill soars.
BP directors meanwhile met in London on Monday to discuss whether to suspend the dividend as the company said its cost for the disaster had jumped to about 1.6 billion dollars (1.3 billion euros).
"The shares dropped to a low of 351 pence, a 41-pence plunge, which suggests that some investment firms are fearing that the dividend will be scrapped," said Rajesh Patel, head trader at financial betting firm Spread Co.
"Obama is demanding an escrow fund be set up to cover the clean-up costs and their latest proposal to cap the leak has no guarantee of succeeding either."
US officials on Sunday had demanded that BP set up a special fund to cover claims for damage done by the spill.
"BP's board are discussing what to do with their dividend this afternoon and it is a massively important decision for investors whatever they decide," Patel said.
"It looks though like some (investors) have decided that enough is enough with BP."
© 2010 AFP