By the end of the day, London’s top index had dropped back by 42 points, closing at 7,144.14 a reduction of 0.6%.
More than 5% was wiped off BAT’s share price as analysts at Goldman Sachs removed its advice that investors should buy the cigarette maker’s shares.
Goldman reduced the target price on BAT’s shares to 3,800p – down 250p from its previous forecast for the stock.
Without much in the way of big earnings to drive it, the FTSE 100 has retreated from its six-week high near 7,200, although losses remain contained for now
Elsewhere, traders had their eyes fixed across the pond where the US Federal Reserve was set to make its interest rate decision.
“Given the uncertainty prevailing on any afternoon ahead of a Fed decision, it is not surprising to see the cautious attitude of the past two days continue on Wednesday afternoon,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“Without much in the way of big earnings to drive it, the FTSE 100 has retreated from its six-week high near 7,200, although losses remain contained for now.
“More than usual, it feels like everyone will reassess their positions once the Fed decision is known, but hints today from the Fed’s ‘Whisperer’ suggest that, once again, the world’s most important central bank will take a hawkish line.”
In New York, the S&P 500 was down 0.6% and the Dow Jones down 0.2% shortly after European markets closed. In Germany, the Dax closed down 0.6%, while the Cac 40 in Paris dropped 0.8%.
In company news, Next said that it had seen a small rise in its quarterly sales, as a return to in-store shopping offset a dip in online sales.
In its UK and Ireland shops, customers spent 3.1% more over the three months to the end of October, while online they spent 1.9% less.
Shares in the business rose by nearly 2%.
Meanwhile, pharmaceutical giant GSK saw its shares tread water despite hiking its forecast for the full year.
The business said that sales are expected to rise between 8% and 10% in the financial year when adjusting for currency changes, with underlying earnings up between 15% and 17%.
The biggest risers on the FTSE 100 were Rolls-Royce, up 1.56p to 83.06p, Airtel Africa, up 2.1p to 118.1p, B&M, up 5.9p to 343.9p, AstraZeneca, up 174p to 10,520p, and Next, up 79p to 5,042p.
The biggest fallers on the FTSE 100 were British American Tobacco, down 180.5p to 3,284.75p, Antofagasta, down 60p to 1,171.5p, Croda, down 220p to 6,476p, Anglo American, down 89p to 2,677p, and Smurfit Kappa, down 80p to 2,820p.
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