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London Markets: FTSE struggles as oil stocks decline, and Primark owner ABF drops on results

London stocks struggled for traction on Thursday, weighed by losses for heavily weighted energy stocks and banks, with shares of Primark-owner Associated British Foods dropping after results.

The FTSE 100 index UKX, -0.38% fell 0.2% to 7,574.93, in a week that has seen the index gain 0.4% so far. That’s as U.S. stocks climbed in early trade after another pullback, and Asian equities climbed after interest rate cuts from China. The pound GBPUSD, +0.18% rose 0.3% to $1.3647.

Oil prices CL00, +0.03% BRN00, -0.10% were backtracking from a run that has seen the commodity reach 2014 highs, which took the shine off shares of Royal Dutch Shell RDSA, -2.41% RDS.A, -2.26%, down more than 2% and BP BP, -1.81% BP, -2.16%, off 2%.

Banks were under pressure across the board with NatWest NWG, -1.26% NWG, -2.12% down over 2% and Barclays BARC, -1.16% BCS, -0.70% and HSBC HSBC, -0.62% HSBA, -1.19% dropping over 1% each.

The biggest decliner was Associated British Foods ABF, -4.83%, down 3.5% after the multinational food processing and retailing company said revenue for the first quarter rose, but Primark sales declined, and left its full-year guidance unchanged. ABF said Primark sales from now to April are anticipated to be significantly better than those of the same period a year ago.

James Grzinic, analyst at Jefferies, remained upbeat, with a buy rating on the company. “Omicron-reduced footfall late in Q1 has impacted Primark sales less than we had feared, hopefully marking the last COVID-related deterioration in sales momentum. Past periods of reduced restrictions have shown Primark’s ability to defend strong consumer attractions and double-digit margins,” said Grzinic.

Deliveroo ROO, +2.80% shares jumped 3% after the food-delivery service reported its gross transaction value growth in 2021 was at the top end of the guidance range.

Burberry shares BRBY, +2.54% were up a second day after the luxury retailer reported higher revenue and comparable-store sales in the third quarter of fiscal 2022.

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