A steep drop in 
BG Group (BG.) shares held back the entire FTSE 100 on Wednesday. Shares in the oil and gas company fell by 14% after it announced that it expected lower production growth for this year and next year.
“[BG] now expects 2012 production growth of about 3%, which is about half of what we previously expected,” said Morningstar analyst Allen Good. “More important, BG expects 2013 production to be flat, well below the double-digit growth anticipated by us and the market. As a result, we are placing the shares under review until we incorporate the new guidance into our model … Our confidence in BG's ability to forecast its growth ... is diminished at this point.”
Another laggard on the FTSE 100 was Barclays (BARC), which announced that it is now facing two new investigations by US regulators, which could further hurt the bank’s reputation. Shares in Barclays are off by 5%.
These two companies put a huge amount of pressure on the FTSE 100. The benchmark index dropped by 67 points, or 1.2%, to close at 5,783. The FTSE 250 also experienced losses, but they were not as severe: the mid-cap index declined by 19 points, or 0.2%, to close at 11,935.
European Economics: Grim Jobs Report
Worse-than-expected jobs figures out of Europe may have also caused a sour mood to spread in the markets.
“The eurozone jobless rate came in at 11.6%, whereas analysts were expecting 11.4%,” said David Madden, a market analyst at IG. “Rising unemployment puts further pressure on European leaders, which might help them to make more of an effort to find a real solution to the debt crisis. A meeting was held today to discuss Greece and its deficit reduction efforts; German finance minister Wolfgang Schaeuble said there is still no deal in place, though some progress was made.”
US Markets Reopen After Hurricane Sandy
Meanwhile, US markets have reopened after being closed for the last two days because of Hurricane Sandy. While investors were originally concerned about the impact the natural disaster would have on insurance companies, Morningstar analyst Drew Woodbury says the insurance sector will be able to bounce back rather easily from this setback.
“Insurance is a volatile business, and paying claims for occasionally large losses is part of the natural course of business for these companies. [In the long run, the storm] could help harbour a more broad increase in prices. In the most recent quarters, many insurers have been noting mid- to upper-single-digit price increases, which may be indicative of the beginning of an improving pricing market.”
