Legal boost puts the spark into tobacco

TOBACCO companies burned bright today following a court ruling in the US that effectively protects them from civil lawsuits brought by cancer sufferers.

The Supreme Court of California ruled overnight that no evidence from either the industry or from smokers may be introduced that emanates from the 10-year period from 1988 to 1998 when a law protecting the industry was in place. But smokers may still sue for illnesses diagnosed before 1988, prior to the law being introduced. The ruling was delivered as part of a lawsuit being brought against American tobacco giants Philip Morris and rival RJR.

However, it will also affect the likes of BAT, up 16p at 7281/2p, which has been fighting claims in the US courts brought by cancer sufferers against its US subsidiary Brown & Williamson. Gallaher rose 81/2p to 6391/2p and Imperial Tobacco added 20p to 1026p. Share prices rallied from opening falls to trade higher amid claims that one big hedge fund had made a pounds 5 billion switch out of bonds and back into equities. The FTSE 100, down almost 96 points first thing, rose 27.9 to 4024.3.

Cable & Wireless retreated 33/4p to 1511/4p after credit rating agency Moody's downgraded its rating from A2 to A3.

On the High Street, Tesco continues to find itself on the receiving end of a mauling by stock market bears as the price dipped 43/4p to 2021/4p. It has begun its preclose season briefing with brokers and says profits should be "broadly in line" with market forecasts. Brokers suspect the group may have begun to see a slowing down in like-for-like sales growth. Rival Wm Morrison was another weak market, losing 41/2p at 1821/4p.

Boots touched 536p before rallying to trade 31/2p better at 549p. Broker UBS Warburg has downgraded its recommendation from hold to reduce and slashed its target price from 550p to 500p. It reckons shares of the High Street chemist look expensive and trade at a premium to its rivals.

Pick 'n' Mix retailer Woolworths rallied off its low with a rise of 3p to 26p. City speculators say the dramatic fall in the price since it broke off merger talks with Philip Green's Bhs may move him to take a second look at the ailing business.

Anglo-Dutch steelmaker Corus hardened 4p to 491/2p as US securities house Goldman Sachs raised its recommendation on the shares from market perform to recommended list with a target price of 100p. A line of 2.34 million shares went through at 453/4p. Rival Precoat International marked time at 741/2p after buying back 6.21 million of its own shares at the 95p level.

US securities house Morgan Stanley has reduced its price target on HSBC, 111/2p better at 7131/2p, from 900p to 800p. It has also lowered its target on Lloyds TSB, 4p cheaper at 568p, from 700p to 600p.

The new Premier League season kicks off in less than two weeks but shares of last year's also-rans Manchester United have struck a new low, dipping through the 100p level for the first time with a fall of 41/4p to 993/4p.

Irish racehorse owners and financiers JP McManus and John Magnier still hold almost 9% of the shares through Cubic Expression and must now be nursing a trading loss. Dealers say high transfer fees and big salaries are to blame.

Last month United paid pounds 33 million for Leeds defender Rio Ferdinand.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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