FTSE: 5,937.30 (–37.46) Mid 250: 11,730.20 (–13.20) Small Cap: 3,267.86 (–8.27):GOVERNMENT PLANS to bring in further restrictions on the marketing of cigarettes took a toll on tobacco stocks yesterday as London equities lost ground.

British American Tobacco fell 2.8 per cent to £24.36½. This came on the day BAT traded without further rights to its latest dividend payment, coinciding with ministers announcement of plans to ban the display of tobacco products at the point of sale.

The department of health in England was also expected to use National No Smoking Day to start a consultation procedure about the packaging of cigarettes, designed to discuss removing branding from products.

The FTSE 100 fell 37 points to 5,937.50, a fall of 0.6 per cent.

Brent crude climbed on concern that turmoil in Libya may spread, disrupting supplies to Europe.

“Traders continue to trade sensitively to any increase in the price of crude oil,” said Joshua Raymond, a market strategist at City Index in London.

Tullow Oil slipped back after it missed profit forecasts, reporting annual earnings of $152 million, up from $33 million but shy of the $192.3 million mentioned in consensus forecasts. Shares in the company fell 3.2 per cent to £14.13.

News of a €3.2 billion bid from Rolls-Royce and Daimler to take control of German engine maker Tognum with a joint venture was well received, sending shares in the Derby-based company up 3.2 per cent to 619.5p.

Rolls-Royce said its existing gas and medium-speed diesel business would be moved into the enlarged group, with Tognum investors offered €24 a share, a 30 per cent premium to the company’s closing price in Friday.

Shares in Prudential advanced after its annual operating profit rose 24 per cent to £1.941 billion, beating forecasts. The stock gained 4.9 per cent to 749p.

Restaurant Group, owner of the Frankie Benny’s and Garfunkels chains, was the best performing stock on the FTSE 250 after it reported a 12 per cent rise in adjusted profit before tax of £56 million. The shares rose 9.4 per cent to 306.1p.

Shares in Sports Direct were in demand after it said none of its employees was under investigation by the serious fraud office in its investigation into the company’s £220 million refinancing.

The stock rose 1 per cent to 182p. – (Copyright The Financial Times Limited 2011/Bloomberg)