Burberry rises, FTSE 100 slips
The FTSE 100 declined on Wednesday as miners finally succumbed to the pressures being applied to their industry by the seemingly endless stream of negative data reports coming out of China. The situation in China has become so concerning that investors seemingly ignored the current rally that is taking place in the gold market, which usually supports miners during downward trends in the stock markets.
The FTSE 100 snapped its short but significant run of gains from the first half of the week to decline by 8.12 points, 0.1 percent, to close at 6504.96. Stocks on the London Stock Exchange had risen over the previous two days due to exceptional performances from financial institutions and high street banks such as the Royal Bank of Scotland, however China has finally gotten the better of Europe’s most prominent stock index.
Burberry Group PLC led the FTSE 100 in gains with a 69 point advance, equating to 4.79 percent, to close the day at 1509p. It was a fairly rocky day for the luxury clothing manufacturer, with preopening prices in the region of 1520 and a dip to less than 1490 during mid-morning trading. However, after announcing that their sales for the second quarter had risen by more than 20 percent investors had solid grounds to place faith in the stock which has seen numerous ratings upgrades over the last few months. Burberry have expanded into Asia with an extremely aggressive marketing plan, which appears to be paying off as they enjoy a second consecutive quarter of better-than-expected results.
Tesco fought back towards the end of the session to close at 349.30p after sliding below 347p on multiple occasions throughout the afternoon. The 1.7 percent advance was largely down to BNP Paribas upgrading their rating due to Tesco being proactive in their attempts to turn their business around after recent poor performances. BNP Paribas said that the steps Tesco’s were taking put them ahead of their competitors and left them in a prime position to retake their position as the undisputed leader of the food retail market in the United Kingdom.
Outdoor specialists Halford’s enjoy a rise of 11.4 percent as their retail sales beat expectations for the second quarter. Expectations had been lowered due to a wet start to the summer in Britain. Halford’s closed at 354.5p.
Miners led the FTSE 100 lower with a terrible performance on the back of China’s seemingly increasingly likely economic slowdown. Fresnillo saw a decline of 5 percent while RandGold Resources slipped by 2.6 percent, closing at 903.5p and 4105p respectively.
Elsewhere security firm G4S fell on the back of concerns that they would miss expectations for the quarter, fears that were compounded by Goldman Sachs re-emphasising their rating of the company has a “sell” – advising investors to seek a price somewhere in the region of £1.94 per share. The stock slid to 225.6p, a decline of 1.7 percent.