Fears that the European Central Bank will fail to prescribe the medicine needed for the ailing eurozone triggered big losses on London’s leading shares index today.
The FTSE 100 Index closed 1.5% or 86.4 points lower at 5,672 ahead of the ECB’s policy announcement on Thursday, despite encouraging comments from ECB President Mario Draghi that buying certain government bonds would fall within the bank’s mandate.
Tobacco firms came under significant pressure amid reports that Russia, the world’s second-largest tobacco market, will submit a law banning smoking in public places by November 1.
Lucky Strike owner British American Tobacco was 63p lower at 3,270.5p, while Embassy and Lambert & Butler firm Imperial Tobacco was 38p down at £24.49.
In corporate news, pub companies Greene King and Spirit Pub Company posted resilient updates in the face of Olympics disruption.
Greene King said underlying sales rose 5.1% in the past 18 weeks, helping its shares rise 10p to 573.5p.
There was a similar story at Spirit – the owner of the Chef & Brewer and Fayre & Square brands – which saw sales at its managed estate rise 4.1% in the 12 weeks to August 18. Shares were initially higher before closing 1.5p lower at 55.5p.
The best performance in the FTSE 250 Index came from equipment rental firm Ashtead, which said results for the year to May will exceed its expectations after record first quarter underlying profits. Shares jumped 12% or 33.4p to 315.9p.
The biggest Footsie risers were Morrisons up 0.9p at 279.1p, Diageo ahead 3p at £17.54 and Petrofac up 2p at £15.18.
Among the biggest Footsie fallers were ARM Holdings down 31.5p at 528p, Evraz off 8.9p at 218p, Weir Group down 59p at £15.80 and Admiral off 40p at £11.10.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted John Menzies rose 1.87% at 620.5p.
On the fallers board, Wood Group lost 2.53% at 809.25p and Aggreko dropped 2.27% to £22.84.