'Safe haven' U.S. tobacco stocks light up amid Brexit gloom

Fri Jun 24, 2016 12:27pm EDT
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(Reuters) - Shares of the biggest U.S. tobacco companies were up on Friday as investors viewed them as safe investments amid a sharp slump in U.S. stocks after Britain voted to leave the European Union.

Shares of Altria Group Inc (MO.N: Quote), the largest U.S. cigarette maker, touched a record high of $67.97 in morning trading.

Reynolds American Inc's (RAI.N: Quote) shares were up 1.4 pct at $51.53, touching a more than 3-month high of $51.84.

"With Brexit potentially delaying an (interest) rate hike in the U.S., this move likely favors our higher-yielding names, and in particular U.S. tobacco (RAI and MO)," Cowen & Co analysts wrote in a note.

"We expect that investors will view global tobacco as a relatively safe haven in a risk-off environment," they said.

However, shares of Philip Morris International Inc (PM.N: Quote) - the international arm of Altria - were down 2.4 pct at $99.47. The company generated more than a third of its revenue from the European Union last year.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty)

A worker smokes a cigarette in the Willets Point area of Queens in New York October 27, 2015. REUTERS/Andrew Kelly