Europe open: Shares run out of puff on US nicotine cut report
European shares made a subdued start on Tuesday after record highs a day earlier, as tobacco companies fell on reports of plans to cut nicotine levels in cigarettes sold in the US.
The pan-European Stoxx 600 index was down 0.33% at 0751 GMT with all major regional bourses lower. The benchmark has been hitting records during April and is up 10.4% in the year to date.
Shares in British American Tobacco and Imperial Brands were both down more than 5% after a report in the Wall Street Journal said the Biden administration was thinking about forcing tobacco companies to lower nicotine levels. A deadline for declaring a ban on menthol cigarettes was also reportedly looming.
The UK FTSE 100 was down 0.21%, while Germany’s DAX was flat and France’s CAC 40 slipped 0.55%.
UK job figures for the three months to February were released, showing the unemployment rate fell to 4.9%, better than the steady 5% forecast by analysts.
However investor sentiment was dampened by data showing an unexpected 56,000 drop in UK payrolls for March - the first decline in four months.
“Though on the surface the numbers look broadly positive, the knowledge that furlough is acting as the final line of defence against a potential jobs disaster appears to have undermined faith in this morning’s figures,” said Spreadex analyst Connor Campbell.
Investors were also waiting on the release of key corporate results in the US due out after the market close in New York, including from media giant Netflix.
Shares finished modestly lower overnight on Wall Street, driven by weakness in technology stocks including Tesla and chip-maker Nvidia. The latter fell after the UK government said it would look into the national security implications of its acquisition of ARM Holdings.
In other equity news, shares in French food group Danone fell despite the company maintained guidance for returning to profitable growth in the second half of 2021.
Swedish medical gear maker Getinge jumped after it posted a rise in first-quarter core profit.
Shares in cybersecurity firm Avast rose as the company raised guidance for the year after posting an increase in first quarter profits.
The company confirmed revenue of $237m during the period, up 10% year on year, while core earnings were up 10.3% to $134m.