Yesterday's trading: Burberry price closes in fashion

By Geoff Foster for MailOnline
Updated: 03:17 EDT, 24 September 2009

Burberry strutted its stuff on the Footsie catwalk, striding imperiously forward to touch 511.5p before closing 25.9p higher at 502.5p.

Geoff Foster: The Footsie retreated on profit-taking.

The shares were en vogue after the 153-year old British luxury fashion house on Tuesday brought the 25th anniversary of London Fashion Week to a spectacular close.

All of the industry was out in force to see Burberry's spring 2010 Prorsum collection.

Excitement reached fever pitch among the glamorous celebrities in attendance as it was the first time Burberry has shown the collection on home soil, having decided to switch it from the runways of Milan.

City heads were turned by comments about buoyant current trading made by chief executive Angela Ahrendts after the show.

She waxed lyrical about how the UK business was 'on fire' in recent months, thanks to the weak pound. Tourists have flocked to their stores in their droves. The Japanese, in particular, love its trademark black-red-tan tartan trenchcoats and hats.

Elsewhere, news of renewed cash calls worth a combined £1.45bn raised fears in some City quarters that the market is now definitely looking a bit 'toppy' and due a healthy correction following its spectacular performance this quarter and since the March low.

Up 36 points initially after the CBI proclaimed the UK recession was over, the Footsie retreated on profit-taking to close 3.23 points lower at 5,139.37. The FTSE 250 declined 31.66 points to 9,217.01.

Wall Street dipped 14 points as New York traders awaited the conclusion of the two-day Federal Open Market Committee meeting. The Federal Reserve is expected to leave US interest rates unchanged at 0.25%, but dealers will pore over the accompanying policy statement for any hints about future moves.

Cazenove moved Prudential to 'outperform' from 'in-line', helping shares of the insurance giant climb 22.5p to 587p. The broker says there is good potential for a re-rating, given the strong earnings and dividend track record recently. Pru simply looks too cheap.

Reports of a pending upbeat circular lifted international bank Standard Chartered 64p to 1544p.

Lloyds Banking Group, 43% owned by the UK taxpayer, firmed 1.2p to 108p.8p on a buy recommendation from Execution Research. The broker says the Government's Asset Protection Scheme is a sub-optimal way to recapitalise the sector and should be reconsidered. Such action would require Lloyds to raise £16bn in a rights issue - viewed as achievable and hugely positive.

On the other hand, Execution rates Royal Bank of Scotland (0.95p off at 52.4p) a 'sell'. It would need an estimated £35bn of capital to escape the APS scheme - nearly impossible to raise in a rights issue. It says RBS will remain loss-making in 2011 and is worth 38p a share.

Revived US takeover gossip accompanied a speculative 7p gain to 183.4p in Chloride.

Shares of pub groups were as flat as a pint of homemade scrumpy after UBS warned that leased and tenanted pub margins are unlikely to return to former highs following the impact of the smoking ban and recession. The sector has been overvalued since November 2008.

Enterprise Inns shed 11.2p to 132.26p as the broker downgraded to sell, while Marston's eased 2p to 104.6p for the same reason. Mitchells & Butlers lost 14.4p to 284.1p on nervous selling ahead of today's trading statement.

Reflecting an Oriel Securities buy recommendationin the wake of the better-thanexpectedinterims, Gulfsands Petroleum gushed 7.5p to 251.5p. Regal Petroleum rose 15p to 117p after striking gas in the Ukraine. Bank of America/Merrill Lynch says it is still the cheapest stock in the sector.

Dealers expect biotech company Osmetech (0.375p off at 2.125p) to now make progress after a line of 20m shares were cleared in the market.

Revitalised by entrepreneur Richard Griffith's purchase last week of a 10% stake, Coms edged up 0.5p further to 12.5p. The provider of internet telephony services has launched an innovative video conference service based upon the Polycom CX5000 video conferencing phone developed in partnership between Polycom and Microsoft.

Stockbroker Canaccord closed flat at 550p despite making its first acquisition since floating on AIM in 2005. It has acquired Intelli, a corporate advisory and broking boutique, from Midas Group, a small UK financial services business.