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Oil stocks weigh on FTSE but Unilever climbs on strong sales

Oil majors and Asia-focused banks weigh on FTSE 100 but shares in Unilever rally on strong first quarter sales.

Oil stocks weigh on FTSE but Unilever climbs on strong sales

Oil majors and Asia-focused banks weighed on the FTSE 100 but consumer goods giant Unilever (ULVR) climbed on positive first-quarter results.

The UK blue-chip index fell 18 points, or 0.2%, to 7,453 as oil majors dipped on lower oil prices, with Brent crude futures down 0.4% to $71.32 a barrel, following strong US production undermining Opec-led supply cuts as well as an unexpected fall in US crude inventories.

Shell (RDSb) fell 1% to £24.83, while BP (BP) was down 1% at 568p.

Weakness in Asian markets, retreating from nine-month highs, pulled down UK-listed financial heavyweights with large exposure to the region. Prudential (PRU) dipped 1% to £17.66 and Standard Chartered (STAN) fell 2% to 662p.

Pharmaceutical stocks AstraZeneca (AZN) and GlaxoSmithKline (GSK) were hit by a sell-off US healthcare companies over regulatory concerns, both down 1% to £58.53 and £15.30 respectively.

Meanwhile, aerospace engineer BAE Systems (BA) and consumer goods business Reckitt Benckiser (RB) traded without entitlement to their latest dividend. BAE was down 17p, or 3%, to 494p and Reckitt Benckiser fell 41p, or 1%, to £58.27.

Unilever was the biggest riser on the UK’s main market, climbing 3% to £45.18, thanks to stronger-than-expected quarterly underlying sales growth, up 3%. This was helped by higher prices, up 2%, and volume growth, up 1%, along with strength in emerging markets, where underlying sales grew 5%.

‘Emerging markets continue to drive growth at Unilever, despite political and economic strife in South America denting sales,’ said Laith Khalaf, senior analyst at Hargreaves Lansdown.

‘Unilever’s global footprint helps the consumer goods giant to capitalise on growth opportunities, wherever they may be in the world, while at the same time helping to paper over the cracks in regions which might not be doing so well.’

Star manager Nick Train holds Unilever in all of his funds, including a 9.6% position in the FTSE 250-listed Finsbury Growth & Income (FGT) trust, which was up 0.3% this morning to 859p.

The FTSE 250 was also dragged lower by a number of stocks trading ex-dividend, down 72 points, or 0.4%, to 19,787.

Motor insurer Hastings (HSTG) was down 11p, or 5%, at 221p, power producer Drax (DRX) fell 18p, or 5%, to 349p and engineer Vesuvius (VSVS) lost 21p, or 3%, to 616p.

Price comparison website (MONY) jumped 8% to 376p with 12% revenue growth in the first quarter.

‘The standout performance was in energy switching driven by the energy price cap increase, which was announced in February and started to impact bills in April,’ said Edison Investment Research analyst Russell Pointon.

However, growth in its insurance arm, which is the largest part of the group, remained subdued at 2.5% and while its Money segment grew 9.5% but only against a weak previous figure. 

‘Despite the strong trading there is no change to the full-year outlook with tougher comparisons in the Money segment and the reasonable expectation that energy switching will moderate,’ said Pointon. 

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