FTSE Lower as Burberry Shares Struggle

The FTSE 100 slipped during the early hours of trading, tracking the wider markets. The UK’s leading index fell by 12.7 points, down to 7,512.59, shortly after the opening bell. One of the poorest performers of the morning was the fashion brand Burberry, who shed 2 percent after suffering a ratings cut from HSBC. The bank downgraded Burberry from ‘hold’ to ‘reduce’.

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The FTSE 250 also struggled, with shares in AO World, the electrical appliances retailer, falling by 6 percent after the company warned that it had seen a slowdown in its UK business. The company said that it had seen challenging trading conditions during the second half of the financial year and that initial signs were that those struggles were continuing into the current quarter.

AO has seen a 17 percent increase in annual revenues, but costs have increased as well and full-year operating losses are up from £10.7 million last year to £12 million for this year.

In the currency markets, the pound is up by 0.2 percent against the dollar, to $1.2933 and has climbed by 0.3 percent against the euro, up to 1.1498 euros. In recent months, the FTSE 100 has tracked the value of the pound, with a weaker pound resulting in gains for shares because of the number of companies in the FTSE that take their earnings in dollars. The current political climate, however, means that there are many other fundamentals that are having a strong influence on the index.

 

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