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Why British American Tobacco plc, HSBC Holdings plc And BHP Billiton plc Should Lag The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) continues its slide, losing another 45 points so far this morning to 6,409. It has yet to dip below the 6,400 level, which some people seem to think is relevant — though absolute index values, of course, have no real meaning. It seems the markets are nervous ahead of today’s update from the US Federal Reserve, amid growing fears of a cut in economic stimulus measures — it’s sure to happen sometime fairly soon, and punters need to just get over it.

The gloom is also affecting individual shares. Here are three that are falling today:

British American Tobacco

Shares in British American Tobacco (LSE: BATS) fell 63.5p (2%) to 3,343p this morning, on the day the shares went ex-dividend. And it’s a frequent phenomenon to see a share price fall by more than the dividend price on the day — in this case we had an interim dividend of 45p per share, and the shares fell by an additional 18.5p. Of course, weakening sentiment towards the tobacco business may be playing a part, but investors considering selling will often wait for ex-dividend day.

Analysts are still expecting British American to grow its earnings per share (EPS), with a 6% rise forecast for the full year, and a dividend yield of around 4.3% seems likely.

HSBC Holdings

We saw something similar this morning at HSBC Holdings (LSE: HSBA) (NYSE: HBC.US), with the bank’s shares losing 17.6p (2.5%) to 687p on ex-dividend day too. This time it was a second-quarter payment of 10 cents (approximately 6.6p) per share, which is way short of the price drop — and the rest of the banking sector appears more stable today.

Despite the fall, the prospects for HSBC are looking good, with a 30% rise in EPS currently forecast and a likely dividend yield of 4.7% on the cards for the full year.

BHP Billiton

The mining sector is turning tail again this week, and BHP Billiton (LSE: BLT) is one of today’s biggest fallers with a dip of 42p (2.2%) to 1,881p. In annual results yesterday, the miner reported a 22% fall in underlying operating profit to $21bn due to falling commodity prices — the firm actually raised its production to record levels.

On the day of the results, the price fell 32p (1.6%) to 1,924p, and the sell-off is clearly continuing across the sector today. The City is, however, optimistic for the year to June 2014, as metal prices have been starting to recover recently — there’s a 20% rise in EPS for BHP currently being forecast.

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> Alan does not own any shares mentioned in this article.