Picture supply: Getty Photographs
It’s been a unstable few weeks for the inventory market, due to the battle in Iran. But the FTSE 100 hasn’t collapsed. There was a correction, a drop of 10%, however no full-blown crash. It’s even clawed a lot of that again.
The blue-chip index closed at 10,667 on Friday (17 April). That’s simply 2.2% under its all-time excessive of 10,910, reached on 27 February, the day earlier than the battle started. That’s a outstanding present of resilience. Can it go ont o break 11,000 from right here?
This has been an odd disaster. We’ve had dire warnings of the largest oil shock in historical past. But buyers have been completely pleased to take Donald Trump at his phrase that every little thing’s below management.
The FTSE 100 may fly
On Friday, they acquired what they needed. Trump confirmed the Strait of Hormuz is open. The FTSE 100 jumped, whereas the S&P 500 hit a contemporary report of seven,126 after rising 1.2%. We’ve seen this quite a bit currently. Geopolitical shocks set off a sell-off, then discount hunters pile in. The Covid stoop in 2020, the Ukraine invasion in 2022 and US tariff threats in 2025 all match that sample.
This confirms our agency view at The Motley Idiot, that promoting in a panic hardly ever pays. As a substitute, buyers ought to grit their enamel, and take the chance to snap up cut-price shares. It isn’t straightforward although, when the headlines scream disaster. Loads could have waited for even decrease costs and missed the bounce.
So what occurs on Monday? The rally may proceed. Or it’d effectively reverse, following stories that Iranian gunboats are concentrating on transport within the Strait of Hormuz. Both method, buyers ought to discover loads of discount shares on the market. To my shock, cigarette maker Imperial Manufacturers (LSE: IMB) is all of the sudden one among them.
Imperial Manufacturers shares look good worth
Tobacco shares have been among the many finest FTSE 100 performers of the millennium. That’s extraordinary, given the regular decline in smoking charges throughout the West. Imperial Manufacturers, like FTSE 100 rival British American Tobacco, has used its branding energy to seize an even bigger share of a shrinking market, whereas transferring into alternate options similar to vapes. And it’s stored buyers candy with a gentle stream of rising dividends.
Its shares fell onerous after Tuesday’s underwhelming buying and selling replace. Imperial Manufacturers reported an honest begin to its 2026 monetary 12 months and caught to steerage of three%–5% development in underlying working revenue. But buyers fixated on slippage in its Subsequent Era Merchandise portfolio, and weaker market share in key areas.
That factors to harder situations forward however the response nonetheless feels harsh. Imperial Manufacturers is the FTSE 100’s largest faller during the last month, down greater than 13.5%. Over 12 months, it’s slipped 6.5%. That leaves it trying good worth although.
Imperial Manufacturers now trades on a modest price-to-earnings ratio of 8.86, whereas the yield has crept as much as a juicy 5.77%. Tobacco shares aren’t for everybody, and so they’re below fixed regulatory menace. However at this worth, and with that earnings, it nonetheless seems to be price contemplating.
There’s a lot extra worth left within the FTSE 100 and that’s unlikely to alter. No matter occurs within the subsequent few unstable days.
