MARKET REPORT: US nicotine U-turn sees tobacco shares light up

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Shares in British American Tobacco lit up after US authorities U-turned on plans to dramatically cut the level of nicotine in cigarettes.

The US Department of Health first proposed slashing the amount of nicotine to ‘non-addictive’ levels back in 2017.

But according to reports, these proposals have been shelved – at least for now.

A spokesman for the Food And Drug Administration regulator said it will continue to push the policy, but Lucky Strike and Pall Mall maker British American Tobacco rose 3.9 per cent, or 110.5p, to 2971.5p on the news.

The US Department of Health first proposed slashing the amount of nicotine to ‘non-addictive’ levels back in 2017. But according to reports, these proposals have been shelved 

Rival Imperial Brands fell 2.9 per cent, or 51.8p, to 1709.2p, as JP Morgan analysts trimmed their price target from 2100p to 1755p.

Chemicals group Johnson Matthey was the biggest faller on the Footsie, down 7.1 per cent, or 227p, to 2989p, after its first-half profit slipped 8 per cent to £225million.

Debt ballooned by £452million to £1.5billion, higher than the £900million or so that analysts had been expecting, as a rise in the prices of precious metals it uses weighed on costs. 

Shares tumbled 7.1 per cent, or 227p, to 2989p.

Outsourcing giant Mitie Group warned annual revenue growth will be hit as clients are reluctant to commit to projects amid election and Brexit uncertainty.

Stock Watch – Blue Prism  

Blue Prism’s annual revenues have surged to ‘at least’ £98million, up from £55million last year.

The Warrington-based group, which automates repetitive office tasks such as processing orders for customers including the NHS, Ebay and O2, added 685 new clients in the year to October 31.

It now has 1,677 customers, up 69 per cent on the year before, it said in an update ahead of full-year results in January.

Shares in the AIM-listed software firm rocketed 30.9 per cent, or 274p, to 1162p.

Profits in the six months to September 30 rose 21.7 per cent to £14.6million, but its shares tanked 7.9 per cent, or 11.2p, to 131.4p.

Plumbing parts supplier Ferguson, which used to be called Wolseley, got a bloody nose from investors in a bruising pay revolt.

Nearly a third of shareholders voted against its remuneration policy and 25 per cent voted down recent pay packages handed to bosses.

Ferguson said it was ‘disappointed’ but has already restarted talks to ‘understand concerns’.

Shares inched 0.3 per cent lower, or 22p, to 6650p.

London’s premier indexes stayed in the red as a stand-off between the US and China over the unrest in Hong Kong put off hopes of an imminent trade deal.

The FTSE 100 closed 0.3 per cent lower, shedding 23.94 points, to finish the day at 7238.55, while the FTSE 250 slipped 0.5 per cent, or 105.39 points, to 20,369.86.

Water provider Severn Trent lifted its dividend 7 per cent to 40.03p a share, despite profits falling more than 4 per cent in the six months to the end of September. 

Chief executive Liv Garfield claimed the Labour Party’s plans to nationalise the water industry puts the budgets of other services, such as schools and hospitals, at risk. Severn’s stock fell 1.9 per cent, or 44p, to 2293p.

Banking giant HSBC, which was down 1.2 per cent, or 6.7p, to 569.7p, was revealed as one of the main advisers on Saudi Aramco’s mammoth stock market float. 

The deal is set to break the record for the number of banks working on a single listing this year.

The mid-cap insurance group Direct Line launched plans to cut £50million of expenses over the next two years under new chief executive Penny James. 

The announcement sent stock 6.4 per cent higher, or 17.5p, to 292.2p and lifted rival firms Admiral Group, up 1.6 per cent, or 33p, to 2060p, and Hiscox, which rose 1.5 per cent, or 19p, to 1275p.

Annual profits surged 13 per cent to £204million in record results at housebuilder Countryside Properties.

But shares fell 1 per cent, or 3.8p, to 371.8p as it announced chief executive Ian Sutcliffe will step down next March to be replaced by Iain McPherson, head of its partnership business. Countryside sold 33 per cent more homes – 5,733 – in the year to September 30.

Time Out Group, which is best known for its namesake magazine but also runs food halls, fell 0.8 per cent, or 1p, to 126.5p after opening a market in Chicago.

 

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