Wednesday paper round-up: Sovereign debt, BP, Prudential

5th May 2010 06:32

Spain's Prime Minister was forced to deny that his country was seeking a financial rescue yesterday amid mounting concern that financial contagion from Greece was spreading. As world stock markets were hit by a wave of selling and the euro suffered another battering, José Luis Rodríguez Zapatero dismissed as "complete madness" talk that he was on the verge of seeking €280 billion in aid from his eurozone partners, the Times reports.Fears that the Greek rescue package will not prevent a wider European meltdown and concern that a mining super-tax will puncture the commodity boom saw London shares plunge to a two-month low. The fall was mirrored in bourses across the world, with Wall Street down 225 points, dropping beneath the critical 11,000 point mark following dismal Asian trading, the Telegraph adds.The FTSE All-World equity index plunged 2.5% - its sharpest one-day downward move in three months - while the euro slumped to a fresh one-year low, ending the session just below $1.30, and industrial commodities followed suit.Gold hit new 2010 highs, before relapsing, and US Treasuries rose as investors sought havens in the face of intense stress in markets linked to European fiscal woes, the FT reports.British Airways has been forced to prove itself sufficiently British to stay in the FTSE 100 after its proposed merger with Iberia.The new holding company for BA and Iberia will be called International Airlines and will be incorporated in Spain. It will also have a listing in Madrid, which according to FTSE rules makes the British flag carrier Spanish. BA is understood to have had three meetings with FTSE International, the company that arranges the FTSE 100 and other indices, to discuss the issue of retaining an additional primary London listing, the Times reports.Goldman Sachs was reported last night to be considering settlement talks with the US regulators over the fraud charges brought against it last month. The reports came as the firm's equities division was fined $450,000 for violations of regulations on short selling in 2008 and 2009 in what has now become a daily war of attrition by regulators against the bank, the Times reports.A new ash cloud grounded flights for the second day in Ireland and the UK after European transport ministers on Tuesday expressed reservations about financial aid for airlines and airports stricken by the Icelandic volcano eruption. Airspace over Scotland and Northern Ireland and airports in the region will be closed again from early on Wednesday morning due to volcanic ash that has been drifting southwards from Iceland. Britain's aviation authority said airports in north-west England and north Wales could also be affected, the FT reports.Prudential was scrambling last night to price its record $21bn rights issue amid turmoil in world markets.Market analysts predicted that Prudential would price its rights issue at a discount of just under 40% to the expected share price after the fundraising. They speculated that the company would offer existing investors about four new shares for every share that they hold at present, for an expected price of about 135p, the Times reports.A band of US politicians has effectively killed oil companies' hopes that vast swaths of coastline will be opened to new deepwater drilling, amid concerns about BP's catastrophic spill. Bill Nelson, a New Jersey senator, and Robert Menendez, a Florida senator, joined California governor Arnold Schwarzenegger in condemning the US government's plans to relax laws restricting new drilling. "The president's proposal for offshore drilling is dead on arrival," said Mr Nelson, adding that any new climate-change laws that support offshore drilling "are not going anywhere," the Telegraph reports.Essar Energy, the UK's largest stock market listing in more than two years, on Tuesday suffered the worst debut of a big London flotation in almost eight years. The power and oil company spun out of India's sprawling Essar Conglomerate tumbled 7.2 per cent on its first day of trading after raising £1.2bn ($1.8bn) last week - the worst fall of any UK share listing since music retailer HMV sank 7.5 per cent in May 2002, according to Dealogic, the FT reports.Confidence among manufacturing exporters is at its highest level since comparable records began in 1996. The Chartered Institute for Purchasing and Supply (Cips) said yesterday that its managers' index of sentiment on export orders in April had risen to 60.71. Any reading of 50 and above signifies expansion, the Independent reports.