London - Britain's FTSE 100 lagged small gains in main euro zone equity indexes on Wednesday as a gloomy update from British American Tobacco weighed on companies which sell consumer goods.
Shares in BAT fell 4 percent by 09:41 SA time as the tobacco firm reported a revenue drop in the first nine months of the year, citing a slow economic recovery in western Europe and adverse currency moves.
Imperial Tobacco fell 1.1 percent, with other companies exposed to weaker consumer demand and currency fluctuations against the pound, such as Diageo, also lower.
Companies which sell consumer staples knocked 14.6 points off the FTSE 100, which was down by 6.59 points, or 0.1 percent, at 6,365.74 points.
It lagged gains of between 0.2 percent and 0.6 percent for main euro zone indexes such as Germany's Dax, which benefited from a Reuters report suggesting the European Central Bank was considering buying corporate bonds to revive the region's economy.
“The BAT update is having an effect on the entire defensive sector,” Manoj Ladwa, head of trading at TJM Partners, said.
“The FTSE has underperformed because of its composition and we expect this to continue.”
MID CAPS OUTPERFORM
The mid-cap FTSE 250 index was up 0.5 percent, boosted by a bullish outlook update by gambling technology company Playtech and bid speculation surrounding specialty chemicals maker Croda International.
Shares in Croda rose 2.8 percent, adding to a 1.8 percent rise on Tuesday, which the Daily Mail and Daily Express attributed to talk of a 4 billion pound (R71 billion) offer for the firm.
Playtech rose 4.7 percent after saying it was confident it would exceed current market expectations after a strong start to its fourth quarter, which followed a 29 percent rise in revenue in the preceding period.
On the downside, Britain's biggest household goods retailer Home Retail Group fell 2.9 percent after announcing plans to close a quarter of its Homebase home improvement stores by 2018 as it prioritises the development of its main Argos chain.
SuperGroup, the British company behind the Superdry fashion brand, fell 3.5 percent after it named former Co-operative Group boss Euan Sutherland as its new chief executive, replacing its founder Julian Dunkerton. - Reuters