By Sara Sjolin, MarketWatch
LONDON (MarketWatch)--Burberry Group PLC led declines for U.K.
stocks Tuesday after a profit warning, while banks and tobacco
shares enabled the FTSE 100 index to curb losses.
The FTSE 100 closed only slightly lower on the session, at
5,792.19, as investors found opportunities beyond Burberry and a
broadly weaker mining sector.
Luxury-goods firm Burberry (BURBY) sank 21%, retreating after it
warned that adjusted profit before tax for the 12 months to end
March 31, 2013, is currently anticipated to come in at the lower
end of market expectations.
Burberry's shares closed at 10.88 pounds, the lowest level since
January 2011.
"As we stated in July, the external environment is becoming more
challenging. In this context, second-quarter retail sales growth
has slowed against historically high comparatives," said Chief
Executive Angela Ahrendts.
In a note, analysts at Citigroup said that they "would expect
the slowdown to be broad-based across Burberry's key Asian,
European and U.S. markets, and mainline stores to have been under
more pressure than outlets."
More broadly, mining shares ranked as London's biggest decliners
in the Tuesday session. On Monday, miners had been among the
strongest performers as weak Chinese data fueled hopes of further
economic stimulus to boost the second-largest global economy.
Vedanta Resources PLC lost 2.4% in Tuesday's trading, as Anglo
American PLC (AAUKY) gave up 2.3% and Kazakhmys PLC tripped
1.2%.
Xstrata PLC and Glencore International PLC both fell 1.5%,
pulling back amid negotiations aimed at reviving the stalled merger
of the miner and the commodities trading house, respectively.
Glencore put forth a final, sweetened offer for Xstrata to the
miner's board and shareholders on Monday. Qatar Holding LLC, one
the largest Xstrata shareholders, said Tuesday it hasn't made a
decision on whether it will accept the new offer.
Banks on the other hand, were on the rise, tracking gains for
the sector across Europe on speculation the Federal Reserve will
announce another round after quantitative easing after the U.S.
central bank wraps up its two-day policy meeting on Thursday.
Shares of Royal Bank of Scotland Group PLC (RBS) gained 4.6% and
Barclays PLC (BCS) rose 2.8%.
British American Tobacco PLC (BTI) also supported the FTSE 100,
up 1.8%. Imperial Tobacco Group PLC (ITYBY) picked up 0.9%.
Outside London's main index, IG Group Holdings PLC rose 6.5%, as
revenue for the first quarter of the company's fiscal year was in
line with expectations at 81.5 million pounds ($130.6 million).
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