Tobacco stocks sank into the red amid reports a tax on vapes could be unveiled in the Budget next week.
The levy – designed to curb underage vaping – will be paid by manufacturers and importers.
Products made with large amounts of nicotine face higher taxes. This measure and a one-off hike in tobacco duty are expected to rake in more than £500million every year by 2028-29.
Shares in Imperial Brands fell 4.8 per cent, or 88 p, to 1730.5 p, British American Tobacco lost 0.3 per cent, or 7.5p, to 2364 p and Supreme slid 3.8 per cent, or 5p, to 127p.
However, Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, played down the impact of a potential levy.
Budget blow: A new tax – designed to curb underage vaping – will be paid by manufacturers and importers
She said: ‘Although the industry is jostling for position in the vaping market, given the volume declines in tobacco, these products are still a relatively small part of the picture.
‘Investors had also been expecting greater regulation in the sector, so a potential increase in tax isn’t a wild surprise and given they are global companies, a change in UK fiscal policy won’t move the dial too much.’
The FTSE 100 edged down 0.02 per cent, or 1.28 points, to 7683.02 and the FTSE 250 added 0.19 per cent, or 36.74 points, to 19,163.66.
Across the Atlantic, Zoom shares were in focus after the tech giant on Monday night reported strong fourth-quarter revenues and announced plans for a £1.2billion share buyback. The stock rose more than 6per cent.
Back in London, shares in Vodafone edged higher amid reports it is in talks with a major Swiss company about merging their Italian businesses.
The FTSE 100 telecoms giant is said to be in discussions over taking a minority stake in a potential tie-up with Swisscom’s Italian division Fastweb.
Swisscom, which employs nearly 20,000 staff, is a mobile, TV and broadband provider. This would create Italy’s second-largest fixed-line broadband operator.
Stock Watch -Brickability
Building materials firm Brickability saw shares tumble after it warned that earnings will be at the lower end of forecasts as sales continue to slump amid woes in the housing market.
Sales by volume for bricks have been ‘significantly’ lower in the past year across the wider market.
Demand for bricks and building materials is set to remain lower until the end of its financial year in March.
Shares plunged 12.3 per cent, or 9.4 p, to 67 p.
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The new company would take its debt off Vodafone’s books, Reuters reported.
A Vodafone spokesman declined to comment. Shares rose 3.5 per cent, or 2.32 p, to 68.4 p.
Less than a month ago, Vodafone rejected a bid from French telecommunications group Iliad to combine their Italian businesses.
Medical devices group Smith & Nephew reported strong growth led by its sports medicine and ear, nose and throat division which specialises in making products that help repair soft tissue injuries.
That helped group revenues rise 6.8 per cent to £1.2billion in the final three months of 2023 and 6.4 per cent to £4.3billion across the financial year.
Shares, however, lost 1 per cent, or 11.5p, to 1114 p. Chemicals group Croda headed in the same direction after posting a 70 per cent fall in profits to £236.3million for 2023.
That was well below the £300million to £320million the group expected.
Sales fell by almost a fifth to £1.7billion. The group expects to report profits of between £260million and £300million this year. Shares sank 3.2 per cent, or 155p, to 4748p.
Unlike Croda, McBride hiked its profit forecasts as it cashed in on consumers flocking to buy more affordable dishwasher tablets, bleach and laundry detergent rather than splash out on branded versions.
The manufacturing group, which makes cleaning products that are sold by supermarkets, expects its annual profit to be between 10 per cent and 15 per cent higher than previous forecasts.
Revenues rose 9.8 per cent to £468million in the six months to the end of December and it swung back into a profit of £30.5million, having made a £1.3million loss during the same period the year before. Shares surged 20.4 per cent, or 15 p, to 88.6 p.
