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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.

OVERSEAS MARKETS

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

FTSE 100 RISERS AND FALLERS

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.

FTSE 250 RISERS AND FALLERS

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.

SMALL CAP RISERS AND FALLERS

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.

Story provided by StockMarketWire.com

Related Company: BATS

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