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European Stocks Edge Lower; Tobacco Stocks Tumble

Stock MarketsApr 20, 2021 03:50AM ET
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By Peter Nurse - European stock markets traded largely lower Tuesday, followed the downbeat lead from the U.S. and Asia, with large-cap tobacco companies hit hard by reports of new U.S. regulation.

At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.1% higher, but the CAC 40 in France fell 0.6% and the U.K.’s FTSE 100 dropped 0.2%, while the blue chip Euro Stoxx 50 fell 0.3%.

British American Tobacco (LON:BATS) stock fell 5.6% and Imperial Brands (LON:IMB) stock fell 5.4% on reports that the U.S. administration wants tobacco companies to cut the level of nicotine in cigarettes to non-addictive levels, something that would undermine the groups' long-term sales prospects.

Atos (PA:ATOS) stock dropped 5.1% after the French IT consulting group announced it had acquired three more companies, while reporting a drop in its first-quarter revenue.

Associated British Foods (OTC:ASBFY) stock fell 2.2% after the U.K.-based retailer reported a halving in first half profit, as the Covid-19 lockdown continued to weigh on revenues at its Primark fashion stores.

Petrofac (LON:PFC) stock fell 1.9% as the provider of services to the oil industry reported a loss for 2020, while Danone (PA:DANO) stock fell 1.9% after posting a 3.3% fall in first quarter sales, as lockdowns continued to dent its bottled water and baby food sales.

This was some positive economic news, as the U.K. jobless rate fell to 4.9% in the quarter through February, from 5.1%, but this has to be tempered with the realisation that company payrolls fell for the first time in four months as more people pulled out of the workforce.

German producer prices for March also surprised to the upside, climbing 0.9% on the month, a gain of 3.7% on the year.

Earlier Tuesday, the People’s Bank of China kept its loan prime rate steady at 3.85% earlier in the day, as widely expected. 

Over in the U.S., streaming giant Netflix (NASDAQ:NFLX) is set to kick off the key FAANG results after the close Tuesday, while there will also be numbers from the likes of drugmaker Johnson & Johnson (NYSE:JNJ) and consumer goods manufacturer Procter & Gamble (NYSE:PG).

Oil prices strengthened Tuesday, aided by continued optimism that the reopening of economies will stoke consumption and also boosted by a weaker U.S. dollar.

Buyers using other currencies pay less for dollar-denominated oil when the greenback weakens.

On the supply side, investors await inventories data from the American Petroleum Institute, due later in the day.

U.S. crude futures traded 1.2% higher at $64.20 a barrel, while the Brent contract rose 1.2% to $67.87 after gaining 4.6% Wednesday. Both contracts are up more than 30% in 2021.

Elsewhere, gold futures traded 0.1% higher at $1,772.15/oz, while EUR/USD traded 0.3% higher at 1.2073.


European Stocks Edge Lower; Tobacco Stocks Tumble

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Comments (1)
Meru Pet
Meru Pet Apr 20, 2021 6:08AM ET
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For tobacco, they do that before April, 20th ? It sounds like a ploy for cannabis
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