Market Report: Burberry enjoys gains on emerging market hopes

Burberry was in fashion on the FTSE 100 last night as investors bought in on hopes of continued demand from emerging markets. The high end retailer, known around the world its for distinctive camel, red and black check patterns, has been notching up sales thanks to continued demand for its pricey products; emerging markets have been an important driver, as Burberry hawked its coats and handbags to the swelling ranks of the newly rich in fast-growing countries like China.

Last month, it published another confident update and beat quarterly sales forecasts, though there were concerns among some about the impact of the grim state of the global economy. Ahead of the update, signs of weakness in the Chinese economy were partly responsible for declines in shares of luxury goods retailers such as Burberry at the end of September.

But the worries took a back seat yesterday, as investors bought in the read-across from the German fashion house Hugo Boss, which upped its earnings outlook yesterday. Boss said it expected Asian sales to almost triple by 2015, with China playing a starring role. This refocused minds on the opportunities for London-listed Burberry, which enjoyed strong gains throughout the session before closing at fourth place on the FTSE 100, up nearly 4 per cent or 49p at 1,402p.

Overall, the market was strong, with the blue chips gaining 56.52 points to 5,567.34 last night, although traders highlighted the fact that, with the European debt crisis still unresolved, volumes remained low.

Italy was under the spotlight, as Prime Minister Silvio Berlusconi, who has been at the focus of market concerns about Rome's ability to implement structural reforms, faced a key parliamentary poll on budget policy. In the end, he won the vote but lost his parliamentary majority.

The result led to some losses on the benchmark index, but not enough to take into negative territory as traders awaited clarity on the political situation. The mid-cap FTSE 250 index also closed higher yesterday, gaining more than 1 per cent or 117.1 points to 10,419.34.

Lloyds was the strongest of the blue chips, rallying by more than 4 per cent or 1.21p to 28.9p despite posting a third-quarter loss. The jump was put down to the positive outlook on margins, which analysts said was supporting investor sentiment around the stock. The remainder of the sector was also firm, with Royal Bank of Scotland gaining 0.08p to 22.33p and Barclays adding 2.65p to 182p.

Weir, the pumps and valves business that fell back despite posting a confident update on Monday, regained its composure, rising by 51p to 1,911p, after Credit Suisse reiterated its positive stance.

The broker also raised its target for the stock to 2,050p as it blamed profit-taking for the weakness on Monday. "A strong share price performance over the last month and management maintaining rather than upgrading... profit guidance contributed to [the fall]," its analysts said.

On the downside, AstraZeneca took the FTSE 100 wooden spoon last night, with disappointing news on an experimental antidepressant drug from the pharma group and partner Targacept dampening the mood around its shares. The treatment failed to meet its goal in a clinical trial, helping to send Astra down by more than 3 per cent or 93.5p to 2,873p.

But the trial result wasn't the only factor weighing on the stock. Also muddying the waters was some negative comment from Morgan Stanley, whose analysts lowered their recommendation on Astra to "underweight" from "overweight", with a revised 3,200 target price, against 3,570p previously.

They were more positive on blue-chip rival GlaxoSmithKline, which was 18p better off at 1,390p after Morgan Stanley upgraded its stance to "equal weight" from "underweight".

Further afield, the chip designer Imagination Technologies shrugged off some questions about its valuation, with the stock rising by a healthy 10p to 470p despite UBS analysts initiating coverage with a "sell" recommendation.

The broker said it considered Imagination as "a high-quality company", similar to FTSE 100 listed ARM, "but in graphics". However, the shares did not reflect the competitive risks in its markets, it warned. "With its price to earnings multiple in the top half of its historical range... and limited estimates upside, we believe outcomes are biased to the downside," the broker explained, setting a 400p target price on the stock. ARM was 3.5p higher at 600p.

The Superdry retailer Supergroup continued to rally ahead of this morning's second-quarter trading update, gaining another 11.2 per cent or 73p to 725p last night, while Premier Foods, which jumped on Monday after announcing an agreement with lenders to defer an upcoming covenant test, added a further 3.1 per cent or 0.114p to 3.812p.

Suggested Topics
Sport
Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Voices
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
Sport
world cup 2014
Sport
Ray Whelan was arrested earlier this week
PROMOTED VIDEO
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
film
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
books
News
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
News
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Life and Style
It beggars belief: the homeless and hungry are weary, tortured, ghosts of people – with bodies contorted by imperceptible pain
lifeRough sleepers exist in every city. Hear the stories of those whose luck has run out
News
Mick Jagger performing at Glastonbury
people
Life and Style
fashionJ Crew introduces triple zero size to meet the Asia market demand
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Santi Cazorla, Mikel Arteta and Mathieu Flamini of Arsenal launch the new Puma Arsenal kits at the Puma Store on Carnaby Street
sportMassive deal worth £150m over the next five years
Arts and Entertainment
Welsh opera singer Katherine Jenkins
musicHolyrood MPs 'staggered' at lack of Scottish artists performing
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Currently there is nothing to prevent all-male or all-female couples from competing against mixed sex partners at any of the country’s ballroom dancing events
Potential ban on same-sex partners in ballroom dancing competitions amounts to 'illegal discrimination'
News
business
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

£60000 per annum: Harrington Starr: A leading provider in investment managemen...

AVS, JVS Openlink Endur Developer

£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

£30000 per annum: Harrington Starr: A global leader in trading platforms and e...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice