Smoking and building help FTSE avoid European malaise

The FTSE 100 escaped the worst of a poor day for global stock markets, as gains for tobacco giants and housebuilders rescued it from the fate of its European counterparts.

The index closed down just 0.3%, or 26.02 points to 7,587.7.

In Germany, the Dax index dropped 1.9% while Paris’s Cac fell 2.2% in part as Marine Le Pen closed the gap on President Emmanuel Macron ahead of Sunday’s first election round.

It came a day after markets across the pond were spooked by the comments of two key decision makers in the US, Fed governor, Lael Brainard, and San Francisco Fed president, Mary Daly.

“After the slide in US markets yesterday on the back of the Brainard and Daly balance sheet and tightening comments, the tone for markets has soured significantly. European stocks sinking sharply as the mood music over more onerous sanctions on Russia ratchets up further, in anticipation of that, we could well see evidence of further Russian atrocities in the coming days,” said CMC Markets analyst, Michael Hewson.

“While the mood music around energy embargoes on Russian oil and gas still retains a degree of reluctance on the part of the European countries holding out, the direction of travel suggests that it’s only a matter of time before the pressure becomes too much and the holdouts, like Germany, have to bow to the inevitable, lest be accused of condoning genocide.”

Wall Street fared better than the continent, but still suffered with the S&P 500 falling 1.3% and the Dow Jones down 0.8% around the time markets were closing in Europe.

The price of Brent crude oil fell 2.5% to 104.01 dollars per barrel, while sterling dropped for a second day running against the dollar.

By the end of the day, one pound could buy 1.3074 dollars, down 0.11%, while it lost 0.01% against the euro, ending at 1.1985.

London’s tobacco giants gained after Imperial Brands, the company behind Gauloises and Rizla, said that it had offset poor performances in Germany and Spain with sales in the UK, US and Australia.

Its vaping and heated tobacco business is growing, it said, while its tobacco sales are in line with expectations.

Shares in Imperial closed up 3.3%, and its rival, British American Tobacco, was up 2.4%.

Barratt Developments also saw a good performance, rising 2.1%, after it said that improvement works linked to the Grenfell cladding scandal would cost the business between £350 million and £400 million.

Redrow said it had set aside a further £164 million, its shares rose 0.3%.

National Grid shares rose 0.9% after the news that the Government is taking part of its business back into public ownership.

The biggest risers on the FTSE 100 were: Imperial Brands, up 53p to 1,669p; British American Tobacco, up 76.5p to 3,305p; Berkeley Group, up 82p to 3,947p; Barratt Developments, up 10.8p to 530.4p; and Vodafone, up 2.5p to 336.6p.

The biggest fallers on the FTSE 100 were: Intermediate Capital Group, down 114p to 1,691.5p; Smurfit Kappa, down 201p to 3,130p; Scottish Mortgage Investment Trust, down 54p to 978.4p; JD Sports, down 8p to 146.05p; and Flutter Entertainment, down 430p to 8,570p.