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April 20, 2021, 12:34 p.m. EDT

Tobacco stocks suffering after report that Biden administration could require nicotine cutbacks

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By Jack Denton

Shares in Big Tobacco companies listed in Europe led stocks across the region lower on Tuesday, following a report that the White House could introduce new regulations for nicotine levels in cigarettes, affecting how addictive they are.

London-listed Imperial Brands /zigman2/quotes/208789104/delayed UK:IMB +1.17% and British American Tobacco /zigman2/quotes/209116881/delayed UK:BATS +1.27% both around 7.5% on Tuesday. In Asia, Japan Tobacco’s stock /zigman2/quotes/208255672/delayed JP:2914 +2.49% was near 2% lower.

Shares in U.S. tobacco giant Altria /zigman2/quotes/208895754/composite MO +0.93% fell more than 6% in late Monday trading and the stock fell another 4% Tuesday. Philip Morris International /zigman2/quotes/201611010/composite PM +0.61% was spared from share price declines on the same day that it was due to report earnings.

The Wall Street Journal reported on Monday that President Joe Biden’s administration is considering new regulations requiring tobacco companies to reduce the nicotine levels in cigarettes sold in the U.S. to the point at which the products are no longer addictive.

A decision on the matter would come as the administration faces a deadline over whether or not it intends to ban menthol cigarettes.

Read more: Biden administration could require tobacco companies to reduce nicotine in cigarettes

European-listed tobacco stocks led shares across the region lower on Tuesday. The pan-European Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.89% was 1.70% lower while London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.76% fell 2%. The CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.45% in Paris dropped more than 2% and Frankfurt’s DAX /zigman2/quotes/210597999/delayed DX:DAX +1.34% slipped 1.5%.

U.S. stocks were similarly lower, with Dow Industrials /zigman2/quotes/210598065/realtime DJIA +0.66% down around 230 points to continue declines after the index closed 123 points lower on Monday at 34,077.

Analysts said that macro factors remain the same, with bond yields, inflation concerns, and the continuing pressure of COVID-19 infections in Europe on the radar as the market turns to a wave of corporate earnings.

“Earnings could be a catalyst to give the overall market a sense of direction,” said Jim Reid, a strategist at Deutsche Bank.

This sentiment was echoed by Michael Hewson, an analyst at CMC Markets, who noted that “it is perhaps not surprising that after the gains seen last week, that we might see some modest profit-taking as we gear up for further big earnings announcements this week.”

Looking past the tobacco stocks, shares in London-listed Czech cybersecurity firm Avast /zigman2/quotes/203787462/delayed UK:AVST +2.41% , a FTSE 100 component, climbed 2% higher after the group reported results for the first quarter of 2021. Revenue and adjusted earnings both grew more than 10% in the quarter compared with the same period last year, and Avast raised its forecast for the full year.

Plus: European soccer’s planned Super League has thrown the sport into chaos. What is it all about?

Danone /zigman2/quotes/205561941/delayed FR:BN +0.29% stock slipped near 2% in Paris following downbeat earnings . The French food giant confirmed its guidance for the full year and said that sales fell in the first quarter of 2021 as the pandemic continued to weigh on its activities.

Shares in Italian soccer club Juventus /zigman2/quotes/200971889/delayed IT:JUVE +2.22% fell 4% in Milan, erasing some of 18% gain on Monday following news that the club would join a prospective breakaway European Super League of top clubs. Backlash from fans and politicians against the new league continued on Tuesday, though shares in Manchester United /zigman2/quotes/205140601/composite MANU +0.91% — listed in the U.S. — fell 3% after climbing near 7% on Monday.

/zigman2/quotes/208789104/delayed
UK : U.K.: London
1,603.00 p
+18.50 +1.17%
Volume: 1.70M
May 7, 2021 4:35p
P/E Ratio
10.15
Dividend Yield
8.59%
Market Cap
£15.17 billion
Rev. per Employee
£511,385
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/zigman2/quotes/209116881/delayed
UK : U.K.: London
2,838.50 p
+35.50 +1.27%
Volume: 3.59M
May 7, 2021 4:35p
P/E Ratio
10.18
Dividend Yield
7.60%
Market Cap
£64.90 billion
Rev. per Employee
£460,156
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/zigman2/quotes/208255672/delayed
JP : Japan: Tokyo
¥ 2,140.00
+52.00 +2.49%
Volume: 8.41M
May 7, 2021 3:00p
P/E Ratio
11.25
Dividend Yield
6.07%
Market Cap
¥3796.89 billion
Rev. per Employee
¥35.89M
loading...
/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 49.95
+0.46 +0.93%
Volume: 6.80M
May 7, 2021 4:02p
P/E Ratio
21.44
Dividend Yield
6.89%
Market Cap
$92.44 billion
Rev. per Employee
$2.94M
loading...
/zigman2/quotes/201611010/composite
US : U.S.: NYSE
$ 97.41
+0.59 +0.61%
Volume: 2.72M
May 7, 2021 4:00p
P/E Ratio
17.60
Dividend Yield
4.93%
Market Cap
$151.82 billion
Rev. per Employee
$404,183
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
444.93
+3.91 +0.89%
Volume: 0.00
May 7, 2021 11:03p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,129.71
+53.54 +0.76%
Volume: 0.00
May 7, 2021 4:59p
loading...
/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,385.51
+28.42 +0.45%
Volume: 78,606
May 7, 2021 6:05p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,399.65
+202.91 +1.34%
Volume: 74,562
May 7, 2021 6:30p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,777.76
+229.23 +0.66%
Volume: 311.63M
May 7, 2021 5:15p
loading...
/zigman2/quotes/203787462/delayed
UK : U.K.: London
463.30 p
+10.90 +2.41%
Volume: 2.33M
May 7, 2021 4:35p
P/E Ratio
36.31
Dividend Yield
2.47%
Market Cap
£4.77 billion
Rev. per Employee
£392,280
loading...
/zigman2/quotes/205561941/delayed
FR : France: Euronext Paris
59.16
+0.17 +0.29%
Volume: 1.35M
May 7, 2021 5:35p
P/E Ratio
19.81
Dividend Yield
3.28%
Market Cap
€38.44 billion
Rev. per Employee
€231,418
loading...
/zigman2/quotes/200971889/delayed
IT : Italy: Milan
0.74
+0.02 +2.22%
Volume: 5.56M
May 7, 2021 5:35p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
€981.06 million
Rev. per Employee
€438,692
loading...
/zigman2/quotes/205140601/composite
US : U.S.: NYSE
$ 16.64
+0.15 +0.91%
Volume: 184,025
May 7, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
1.08%
Market Cap
$2.71 billion
Rev. per Employee
N/A
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