MARKET REPORT

LONDON’S blue chip index fell 1% yesterday after tobacco stocks were smoked by news that the US Food and Drug Administration (FDA) may force companies to cut nicotine in cigarettes down to non-addictive levels.

The FTSE 100 closed lower by 74.64 points at 7,368.37, dragged down by British American Tobacco shares which plunged 362p to 4,960p and Imperial Brands which tumbled 130.5p to 3,315.5p.

In UK stocks, Barclays fell 3.5p to 205.1p. The bank swung to a £1.2bn half-year loss after booking extra compensation costs for mis-selling payment protection insurance (PPI) and taking a £2.5 billion hit from the sale of its Africa arm.

BT dropped 5.75p to 310.4p amid news it will shell out £225m to Deutsche Telekom and Orange in a bid to avoid legal action after its share price collapsed in the wake of its Italian accounting scandal. The payout relates to the sale of EE by the duo to BT for £12.5bn.

Shares in International Consolidated Airlines Group (IAG) ended the day down 0.5p at 593.5p despite reporting that lower fuel costs and a strong Easter helped half-year operating profit before exceptional items rise 37% to €975m (£871m).

The biggest risers on the FTSE 100 were Astrazeneca up 156.5p to 4,481.5p, Pearson up 10.5p to 667p, Diageo up 33.5p to 2,442p, and Royal Dutch Shell’s ‘B’ shares up 20.5p to 2,131.5p.

The biggest fallers on the FTSE 100 were British American Tobacco down 362p to 4,960p, Imperial Brands down 130.5p at 3,315.5p, Johnson Matthey down 106p to 2,797p, and Smurfitt Kappa Group down 61p to 2,283p.