BP today went only halfway to reassuring City investors about its future dividend policy amid fears a cut in the payout to shareholders may be on the way.

The shares reacted with a loss of 130p to 410¾p following a presentation to institutional investors. The oil giant confirmed it had no plans to cut the dividend, but remained uncommitted about the future rate of growth.

Some brokers recently fingered BP as the next blue-chip to be forced to make a cut to conserve cash. It paid out £6 billion last year. But others point out that even if the payout was cut by 20%, the shares would still yield more than 6%.

Meanwhile, Bernstein Research has dropped its rating on BP from outperform to market perform. It recommends switching into Tullow Oil, down 35½p at 669½p, or BG Group, off 44p at 906p.

Dreams of a rally by London stocks were short-lived today as the FTSE 100 index crashed back below the 3600 support level to trade at a six-year low. Support levels have dropped like nine-pins in the past few days as the bad news continues to seep out of the financial sector.

The Footsie briefly touched 3676.86 before again slamming into reverse with a loss of 41.3 points at 3585.53 as it mirrored movements in the Dow future. Its loss on the year to date is now 849.7 points, or 19%.

The queue of companies begging for more cash is getting longer, and the number of blue-chip firms cutting dividends is starting to grow at an alarming rate. That means there is less cash available to be reinvested into the market.

Dealers warn this could have serious longer-term repercussions for investors. Short-covering of HSBC, which rocked the City yesterday with a big drop in profits and a cut in the dividend, proved temporary, the shares retreating a further 4p to 395p.

UBS has cut its target for Europe's biggest bank from 700p to 520p to reflect the higher cost of capital and lower returns on invested capital. But the broker points out the bank is still making a profit, unlike most of its rivals, and is sticking with is buy rating.

UBS has reduced Lloyds Banking Group, down 1.8p at 47.6p, from 140p to 100p to reflect the higher impairment charges in its HBOS subsidiary's corporate book. But it says the shares remain a buy. Barclays touched 76.5p amid whispers it had received another regular visit from the Bank of England. The fall was later reduced to 3.1p to 84.6p.

Property giant British Land traded below its best levels with a rise of 1p to 401p, with rival Land Securities dropping 12p at 486¼p after touching 514½p. Both are due to go ex-rights following almost £1.5 billion of fund-raising in recent weeks.

Xstrata lost 11¼p at 329¾p after going ex the miner's £4.1 billion rights issue as trading in the nil-paid got under way at 128p. Dealers say the price of the nil-paid is being affected by a large number of short positions among the ordinary shares.

Some institutional investors have protested about the group's cash-raising and $2 billion (£1.4 billion) takeover of Prodeco from Xstrata's biggest shareholder, Glencore. The acquisition enabled cash-strapped Glencore, with a 35% stake in Xstrata, to take up its rights entitlement.

RSA Insurance dipped 1.9p to 137p despite Morgan Stanley raising its target from 167p to 181p following full-year results last week. On AIM, Burst Media firmed 0.6p to 5.5p after admitting it had received and rejected an unsolicited bid approach in January, at between 6.3p and 7p a share.

Oil and gas explorer Elixir Petroleum, unmoved on 0.039p, has become the latest in a wave of companies to cancel its AIM listing. It blamed the additional regulatory compliance burden, and said costs incurred in maintaining a secondary listing on AIM exceeded the benefits. Elixir also complained about the low volume of trading in its shares on AIM.