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Cigarette giants drag on FTSE as FDA threatens to cut nicotine levels

28 July 2017 16:49

Media reports that the US Food and Drug Administration (FDA) wants to force companies to reduce nicotine levels in cigarettes to non-addictive levels hit major players in the sector.

British American Tobacco (BATS) slumped 6.8% to £49.60 and Imperial Brands (IMB) suffered a 7% drop to £32.04.

Unsurprisingly, the FTSE traded 1% lower at 7,368 as both companies have a significant market cap and weighting in the index.

Brent crude oil rallied 1.6% to $52.33 per barrel. Gold glittered at $1,269 per ounce and copper nudged lower to $6,327 per tonne.


Weaker than expected results from online retailer Amazon weighed on US sentiment. The Nasdaq index opened 0.5% lower at 6,350 on Friday.


High street bank Barclays (BARC) was in the spotlight thanks to a 13% rise in first half pre-tax profit following materially lower losses in its non-core division, but the share price fell 1.7% to 205.1p.

In other corporate news, British Airways owner International Consolidated Airlines' (IAG) was broadly unmoved at 593.5p on its latest results. After-tax profit increased 2.3% to €567m in the six months to the end of June 2017.

Broadband provider BT (BT.A) said adjusted earnings before interest, tax, depreciation and amortisation declined by 2% to £1,785m in the first quarter.

BT blamed higher pension costs, business rates, sport programme rights and investment in customer experience. Shares in the firm was down 1.8% to 310.4p.


News that Rightmove (RMV) boosted its pre-tax profit by 8.7% to £87.5m in the first half of the year failed to spark the share price at £43.05.

The market was focused on UBM's (UBM) slow growth of 2.2% for its major exhibitions, prompting the stock to fall 1.7% to 705.5p. The events company said it will accelerate dividend growth.

The resignation of Rotork's (ROR) chief executive Peter France has dragged the stock 7.5% lower to 233.1p.

A drop in the operating margin at IMI (IMI) from 12.6% to 12.5% in the first half of 2017 weighed on the share price, which was down 6.1% to £12.08.

Going in the opposite direction was Morgan Advanced Materials (MGAM), up 1.7% to 296.9p on improving momentum in the business and improved organic growth in the second quarter.


Masonry products manufacturer Forterra (FORT) agreed to acquire Bison Manufacturing from Laing O'Rourke for £20m, helping the shares gain 3.2% to 278p.

Micro cap Boxhill Technologies (BOX) announced it expected to see growth and momentum return to the business later this year, triggering a 25% rally to 0.12p.

An improved performance bodes well for Laird (LRD), up 4.4% to 148.3p. The engineering solutions provider reported encouraging progress across all three divisions and said operating profit rose by 40% to £29.6m in the six months to 30 June.

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