By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- U.K. stocks edged up Wednesday, led by
mining companies and luxury-goods producer Burberry Group PLC,
while retailers mostly dropped after a disappointing trading update
from Marks & Spencer Group PLC.
The FTSE 100 index rose 0.2% to 5,879 in early afternoon
trading, as other European markets held in a fairly tight
range.
Shares of Burberry rallied 3.3% after the fashion house said
underlying sales jumped 34% in the latest quarter, beating analyst
expectations. Comparable store sales rose 15% excluding China,
where growth was 30%, the group said.
Seymour Pierce analyst Kate Calvert described the results as "a
faultless start to the year" and said she expects to see consensus
earnings forecasts for Burberry and price targets to rise following
the results.
Miners were the other big climbers Wednesday as commodity prices
rose and as the latest data on Chinese economic growth came in
slightly ahead of market expectations. Silver miner Fresnillo PLC
rallied 5.5%, also buoyed by rising silver prices.
African Barrick Gold PLC climbed 4.5% as gold prices hit a new
record and after the stock was upgraded to neutral from sell at
Goldman Sachs, which cited its attractive valuation.
In the media sector, shares of British Sky Broadcasting Group
PLC dropped a further 2.2%, bringing their monthly losses to 20%.
The main political parties in the U.K. were expected to unite in
calling for News Corp. (NWSA) (NWS) to withdraw its bid for BSkyB
in the wake of a phone-hacking scandal. News Corp. also owns
MarketWatch, the publisher of this report.
Marks & Spencer weighs on retail sector
Marks & Spencer (MAKSY) was the worst performer within
London's benchmark index, dropping 2.9% after reporting a 3.2%
increase in total group sales for its fiscal first quarter.
Santander analyst Rebecca McClellan said that expectations for
the retailer had been rising following a relatively strong trading
update from Debenhams PLC . However, she said the figures for Marks
& Spencer were slightly below expectations and benefited from
one-off factors, including a strong April and an early start to
sales.
"Stripping out these benefits, the trend going forward is likely
to fall into negative territory," McClellan said in a note to
clients.
Among other retailers, shares of Next PLC lost 1.5% and
Debenhams sank 1.4%.
Mid-cap fashion retailer Supergroup PLC bucked the trend,
surging nearly 25% after it reported an 89% jump in underlying
pretax profit for the fiscal year.