London open: Burberry lifts FTSE 100 to eight-month high
The FTSE 100 was trading 0.4% higher at around 6,790 in early trading; it has not closed above this price since May 22nd 2013.
Sentiment was also lifted today by a upwards revision to 2014 growth forecasts by the World Bank, which expects the global economy to expand by 3.2% this year. This is an acceleration from the 2.4% growth in 2013 and higher than its June forecast for 2014 growth of 3%.
However, the organisation did raise concerns regarding rising interest rates and singled out the withdrawal of stimulus by the US Federal Reserve as a specific worry.
Burberry jumps after sales update, Anglo American higher
High-end fashion brand Burberry surged early on after reporting a better-than-expected 14% rise in retail sales in the third quarter, helped by double-digit growth in its key Asia Pacific region. This was ahead of analysts’ predictions.
Diversified mining firm Anglo American was also a high riser this morning after analysts at UBS upgraded the stock from ‘neutral’ to ‘buy’, saying that the risk-reward balance is more “compelling” after recent weakness. The bank said: “Anglo has underperformed the other diversified miners by 18% over the last three months, and, in our opinion, the valuation now looks attractive.”
Despite the upgrade, UBS said it retained its preference for Rio Tinto and BHP Billiton (both rated ‘buy’), giving both stocks a lift today.
In contrast, iron ore group Ferrexpo was under pressure this morning after being cut from ‘buy’ to ‘neutral’ by UBS “due to the elevated political risk in the Ukraine”.
SSE and Centrica were also suffering from the effects of a broker downgrade today after Barclays Capital lowered both stocks to ‘underweight’. Meanwhile, Standard Life was higher after Credit Suisse lifted the shares to ‘outperform’.
Financial services company Hargreaves Lansdown was a heavy faller after saying it will need to increase its assets under management by £3.5bn over three years to cover the anticipated revenue shortfall resulting from the changes made to its pricing model under the Retail Distribution Review (RDR).
UK manufacturer Fenner also slumped after a mixed first-quarter trading update, which said that results in the Advanced Engineered Products (AEP) arm will be “slightly more weighted” in the second half, reflecting the deferral of customer sales.
FTSE 100 – Risers
Burberry Group (BRBY) 1,550.00p +5.51%
Anglo American (AAL) 1,309.50p +3.72%
Prudential (PRU) 1,377.00p +2.00%
Standard Life (SL.) 384.60p +1.99%
WPP (WPP) 1,389.00p +1.83%
Kingfisher (KGF) 393.60p +1.73%
G4S (GFS) 254.30p +1.68%
Sage Group (SGE) 400.10p +1.65%
Pearson (PSON) 1,335.00p +1.52%
ARM Holdings (ARM) 1,012.00p +1.50%
FTSE 100 – Fallers
Imperial Tobacco Group (IMT) 2,177.00p -3.37%
Hargreaves Lansdown (HL.) 1,460.00p -3.18%
Centrica (CNA) 318.20p -2.69%
SSE (SSE) 1,322.00p -2.00%
easyJet (EZJ) 1,662.00p -1.95%
Fresnillo (FRES) 699.50p -1.48%
Randgold Resources Ltd. (RRS) 3,788.00p -1.41%
United Utilities Group (UU.) 657.50p -1.13%
Morrison (Wm) Supermarkets (MRW) 247.10p -1.08%
Unilever (ULVR) 2,391.00p -0.91%