FTSE close: Burberry down, miners up

By Ed Monk for Thisismoney.co.uk
Updated: 12:14 EDT, 26 May 2011

17.10 (close)

Fashion house Burberry was the top faller in the FTSE 100 Index today as its stellar annual results were overshadowed by a bout of profit-taking.

The chain reported a 39% increase in underlying pre-tax profits to £298 million, in line with City expectations, but shares dropped 60p to 1260p after some investors cashed-in on its recent hot run of form.

Despite the performance of Burberry shares, the FTSE 100 Index edged ahead, up 10.9 points to 5881 after being boosted by a strong performance from mining and energy stocks.

London's blue chip index was also not derailed by a 0.3% fall in the Dow Jones Industrial Average after the world's biggest economy received disappointing news about unemployment and the pace of its recovery.

The pound was up at 1.63 against the dollar, which came under pressure following disappointing economic figures. Sterling was also up against the euro, at 1.16, after the single currency lost value as a result of on-going eurozone debt fears.

Mining and energy companies defied a slight dip in some commodity prices to post gains. Copper giant Antofagasta was among the top risers, up 42p to 1258p, after a 29% rise in first quarter revenues, while platinum producer Lonmin cheered 38p to 1534p.

Pumps and valves firm Weir was the top riser after it lifted 5% or 100p to 1984p following a positive broker note.

Man Group, the world's largest listed hedge fund by market value, was another leading riser after annual pre-tax profits of 599m US dollars (£367m) came in higher than forecasts of 560m US dollars made by the company in March. Shares were up more than 2% or 5.9p at 245p.

Meanwhile, Lloyds Banking Group shares received a boost after a report said Virgin Money was planning to put in a bid for its 600 available branches.

Lloyds was up 0.6p at 51.3p, while elsewhere in the sector Barclays was down 0.5p at 271.3p and Royal Bank of Scotland dropped 0.4p to 40.9p.

In other corporate results, United Utilities rose 5p to 622p after it defied the winter weather to meet its leakage target for the last financial year. Operating profits from its water arm were down 17% however, caused by lower prices imposed by regulator Ofwat.

Outside the top flight, defence products firm Qinetiq was down 2.4p to 115.4p after it returned to profit at a statutory level and said a strong performance in its products division offset tough trading in UK and US services.

And Daily Mail & General Trust slid 2% - down 10.5p to 490.5p - after it reported a slide in advertising revenues amid 'volatile and uncertain 'conditions for the newspaper sector.

The biggest Footsie risers were Weir Group up 100p at 1984p, Antofagasta ahead 42p at 1258p, Lonmin up 38p at 1534p, and Man Group ahead 5.9p at 245p.

The biggest Footsie fallers were Burberry down 60p at 1260p, Carnival off 61p at 2395p, Whitbread down 29p at 1620p, and Shire off 25p at 1850p.

16.00: US stocks have plunged - the Dow is trading 70.3 points lower at 12,324.4.

Back in London, the Footsie has seen earlier gains scaled back. It is 12.6 points up at 5,882.7 as today's session draws to a close.

14.40:

The Dow Jones has opened 11.9 points lower at 12,382.8 as US investors digest weaker than expected data that casts doubt on the strength of the economic recovery across the Atlantic.

The Footsie is up 25.3 points at 5,895.5.

13.50:

The official estimate of first quarter US GDP was left unchanged at 1.8% - significantly undershooting forecasts that it would be revised upwards to 2.1%.

The latest US jobless figures brought further disappointment, with an unexpected rise in claims over the past week.

The FTSE 100 is up 23.6 points at 5,893.7.

12.40:

The Footsie is on the move again, up 25 points at 5,895.

Man Group, the world's largest listed hedge fund by market value, topped the risers' board, after annual results beat expectations. It reported pre-tax profits of £367m, higher than forecasted in March.

Shares were up more than 4% or 9.7p at 248.8p.

The banking sector received a boost after a report said Virgin Money was planning to put in a bid for 600 Lloyds Banking Group branches.

Sir Richard Branson, head of the Virgin Group, told the Financial Times he is planning to make a bid for the outlets, which European regulators require Lloyds to sell after it received a bailout from the government during the financial crisis.

Lloyds Banking Group was up 0.9p at 51.7p, Barclays was ahead 2.1p at 273.9p and Royal Bank of Scotland advanced 0.2p at 41.5p.

Qinetiq rose after it returned to profit at a statutory level and said a strong performance in its products division offset tough trading in UK and US services.

The company is braced for another challenging year, but shares still rose 3.2p to 115.2p. We've got a full report here.

11.00:

We have more on Burberry's results, including reaction from City analysts.

The enduring popularity of its handbags and the fashion house's allure for Chinese shoppers spurred a 39% rise in annual earnings.

But profit-taking sent the stock down 43p to 1,277p in morning trading.

We also have a story on annual results from United Utilities.

Revenues from its regulated operations fell 4% to £1.48bn in the year to March 31, while operating profits dipped 17% to £580m.

The utilities firm praised the 'extraordinary efforts' of staff who battled extreme winter weather to ensure the company met its annual leakage target.

Its shares are 3p lower at 614p.

The FTSE 100 has given back some of its gains and is up 11.2 points at 5,881.4.

Ben Critchley, sales trader at spreadbetter IG Index, commented: 'With no domestic economic data to speak of, it seems that London's leading shares are taking direction from the commodity markets once more.'

Looking ahead to the US GDP data due later (1.30pm London time), he added: 'Expectations are for the figure to be upwardly revised, which would certainly help to quell some of the negative sentiment that has been dogging the markets this week.'

The initial estimate of annualised US GDP growth in the first quarter was 1.8%. But a Reuters survey of economists' predictions shows they expect it to increase to 2.1%.

Brent crude is trading at around $113.50 a barrel today. Gold was fixed this morning at $1,521.50 an ounce compared with $1,526.25 at the previous close.

09.40:

The FTSE 100 moved higher today as commodity stocks welcomed a weaker dollar, while traders waited on US GDP data and Burberry reported improving profits.

The tentative recovery following London's sharp sell-off on Monday continued today after mining stocks benefited from a rise in commodity prices.

Dollar weakness drove the resurgence for metals and led to a rise of 23.5p to 1239.5p for Antofagasta and 19p to 1369p for silver miner Fresnillo.

The FTSE 100 Index reflected the improvement, with the top flight up 32.8 points at 5903.5 after a positive session for markets in Asia overnight.

The improvement came despite a bout of profit-taking for shares in luxury fashion house Burberry, which reported full-year results today.

The chain's 39% increase in underlying pre-tax profits to £298m, after a 27% rise in revenues to £1.5bn, was in line with market expectations but shares still dropped 2% or 25.5p to 1294.5p.

Analysts said the fall reflected the fact that shares have risen by around 116% over the last year.

In other corporate results, defence products firm Qinetiq rose after it returned to profit at a statutory level and said a strong performance in its products division offset tough trading in UK and US services.

The company is braced for another challenging year, but shares still rose 5.05p to 117.05p.