Rout of tobacco stocks in US smoking crackdown

TOBACCO firms suffered a sell-off towards the end of trading after US regulators said they wanted to stop cigarettes from being addictive.

The US Food and Drug Administration announced plans to cut nicotine levels to non-addictive levels and will push smokers towards e-cigarettes instead, regulating those closely.

Commissioner Scott Gottlieb described cigarettes as the only legal product that would kill half of all long-term users when used as intended. Traders then ditched stocks in the UK’s two biggest tobacco firms.

British American Tobacco finished down 6.8pc, or 362p, at 4960p, and Imperial Brands fell by 3pc, or 130.5p, to 3315p.

Analysts warned that investors could be over-reacting, given that the plans still require extensive input and will face the lobbying might of the tobacco industry.

Still, tobacco shares account for 7.6pc of the blue-chip index and the US announcement helped push the FTSE 100 down 1pc, or 74.64 points, to 7368. 37.

Also weighing on the markets was change at the top at Rotork, the troubled FTSE 250 valvecontrol systems maker.

Chief executive Peter France left immediately yesterday after nine years. With most of its customers in the oil and gas industry, Rotork has been hit by the slump in oil prices. Executive chairman Martin Lamb is taking over temporarily. Shares fell 7.5pc, or 18.9p, to 233.1p.

Also heavily exposed to the oil price, packaging and cigarette filter maker Essentra said profits fell 35pc to £43m and revenues dipped 4pc for the half- year. Investors appeared cheered by bosses admitting poor performance was due to internal factors and reorganising to focus on components, healthcare packaging and filter products, and its shares rose 0.9pc, or 5p, to 540.5p.

It was a better day for international electronics and wireless component maker Laird.

Shares rose nearly 4pc as it announced a 47pc increase in first-half profits to £24.1m and a 25pc rise in revenue to £440.5m.

It follows a torrid time for the company, which was forced to turn to shareholders in April with a £185m rights issue and was demoted from the FTSE 250 late last year.

Its final dividend for 2016 was scrapped, but yesterday bosses declared an interim dividend of 1.13p. Shares rose 3.7pc, or 5.25p, to 147.25p.

Shell was among the companies pushing up the FTSE 100, with shares continuing to climb a day after it announced that profits had trebled to £2.75bn. Class B shares rose 1pc, or 20.5p, to 2131.5p, while Class A shares rose 0.9c, or 18.5p, to 2115.5p. Miners had a strong day, with Rio (up 0.2pc, or 8p, to 3504p), Randgold Resources (up 0.6pc, or 40p, to 7050p) and BHP Billiton (up 0.2pc, or 2p, to 1364p) all among the FTSE 100’s top risers, amid surging copper prices.

Acacia Mining was left out in the cold – its spat with the Tanzanian government got worse when a senior employee was arrested at the airport.

The firm disputes a £144bn tax bill slapped on it this week. Shares fell 2.4pc, or 4.3p, to 174.2p. On AIM, Frontier Developments, the UK’s only listed video game developer, soared after China’s biggest social media firm, Tencent, bought a 9.9pc stake.

The investment will help it to grow in what some are predicting will become the world’s largest entertainment market.

Shares yesterday rose 17.1pc, or 90p, to 615p.