The London Report: Waning threat of no-deal Brexit lifts UK stocks
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
British American Tobacco led a FTSE 100 rebound after Piper Jaffray analysts advised buying. Worries about a US ban of menthol cigarettes and a patent infringement claim in Japan have pushed BAT to its lowest valuation to earnings in 10 years, even though the dividend should be safe as risks to cash flow look minimal, the broker argued. It expected any change in US legislation to take up to 10 years and argued that BAT had a 50-50 chance of defeating the patent challenge.
The lessening possibility of a no-deal Brexit helped push the wider UK market higher, thanks to domestic earners such as Hammerson and ITV . The rally came in spite of a disappointing day for earnings updates, with stockbroker Hargreaves Lansdown falling after it reported weaker than expected fourth-quarter inflows.
Royal Mail retreated after cautioning that letter volumes were deteriorating faster than expected, while soap maker PZ Cussons dropped after warning that port disruption and weak consumer confidence had held back sales in Nigeria.
CVS plunged after the vet operator mothballed its acquisition strategy and warned that staff shortages had forced it to rely on locums. The profit alert weighed on larger peer Pets At Home .
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