UPDATE 2-FTSE 100 chokes as tobacco firms fall on sales report, drugmakers dip

  • Reuters
  • Stock Market News
UPDATE 2-FTSE 100 chokes as tobacco firms fall on sales report, drugmakers dip
Credit: © Reuters.

* FTSE 100 down 0.1%, FTSE 250 up 0.4%

* Tobacco cos, drugmakers lead losses on main index

* NMC up after hiking FY forecast

* Galliford gains after snubbing Bovis' offer for units

* Thomas Cook surges after Berenberg ups rating (Adds news items, analyst comment, updates share prices)

By Shashwat Awasthi

May 28 (Reuters) - A drop in blue-chip tobacco stocks after a report showing declining cigarette volumes and losses in pharmaceutical giants was enough to offset gains in mining heavyweights and push London's main stock index into the red on Tuesday.

The FTSE 100 .FTSE was 0.1% lower, while the mid-cap FTSE 250 .FTMC rose 0.4%.

British American Tobacco (JO: SNHJ ) BATS.L and Imperial Brands IMB.L were among the biggest drags on the main index after data from Nielsen showed cigarette industry volumes deteriorated in the four weeks to May 18. AZN.L snapped a four-day winning streak and rival GlaxoSmithKline GSK.L also fell after rising for the last three sessions.

The drugmakers gave up more than 2% each, and offset a rise in miners that had capitalised on China's iron ore prices hitting record highs earlier on Tuesday. IRONORE/

The session's trading came against the backdrop of continued uncertainty over China's trade dispute with the United States, after U.S. President Donald Trump said Washington was not ready to make a deal with Beijing but that he expected one in the future.

"News here, rumours there – not a lot for markets to really hang their hats on right now," Markets.com analyst Neil Wilson said.

In a news-driven move, healthcare provider NMC Health NMC.L advanced 7.5% on its best day in more than six months after hiking its 2019 revenue and core earnings targets.

Brexit-sensitive stocks such as retailers, which took a hit last week ahead of Prime Minister Theresa May's announcement that she would resign, also recouped some losses.

"The UK is sort of stuck in limbo, unable to fully move forward with anything Brexit-related until the next PM is found," Spreadex analyst Connor Campbell said.

Shares of mid-cap builder Galliford GFRD.L , one of those to have suffered from the collapse of major government contractor Carillion last year, were up 3.6%. They had earlier surged as much as 8.2% after news emerged of a rebuffed offer for two of its units from Bovis Homes BVS.L . operator Thomas Cook TCG.L , hammered last week by worries over its cashflow and summer sales, climbed more than 21% on its best day since early December, after Berenberg raised its rating to "hold" from "sell", citing bids the company has said it has received for its airline unit. deterioration in Thomas Cook's financial position leaves the company looking for a white knight to pay a fairly punchy multiple for the airline," Berenberg analysts wrote.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FTSE 100 on course for first monthly loss this year



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