July 10, 2014 / 9:01 AM / 4 years ago

Weaker FTSE underpinned by Burberry, Barratt, AB Foods updates

* FTSE 100 drops 0.1 pct
    * Concerns about U.S. earnings season weigh on index
    * Burberry, Barratt, AB Foods gain after updates
    * LSE sinks on reported Qatar stake sale

    By Tricia Wright
    LONDON, July 10 (Reuters) - UK shares inched lower on
Thursday as caution over earnings in the United States, where
British firms have significant revenue exposure, outweighed the
impact of robust domestic corporate updates.
    Minutes from the last Federal Reserve meeting, which showed
the U.S. central bank was still in no rush to begin raising
interest rates, helped to limit the losses. 
    Luxury brand Burberry posted a 12 percent rise in
like-for-like retail sales for its fiscal first quarter to June
30, which traders called a very strong result. Its shares rose
of 2.5 percent. 
    Housebuilder Barratt Developments' stock was up 1
percent after it said it expected its full-year profit to come
in at the top end of forecasts.  
    AB Foods, which raised its annual earnings guidance
after a strong third-quarter from its Primark chain, firmed 1.2
    They were among the top risers on the FTSE 100 index 
which, by 0824 GMT, was down 0.1 percent at 6,713.56 points,
taking its losses this week to more than 2 percent.
    Traders were also mindful of the corporate earnings picture
in North America, where UK blue chips derive around a quarter of
their revenues. 
    As the second-quarter earnings season starts there,
investors will be scrutinising companies' outlooks to see how
they square with equity markets sitting at multi-year highs.
    "I think there's just an overtone of caution in the market
ahead of the U.S. earnings season... (But) the market's rallied
up a lot so it's just a case of profit-taking rather than
serious concern," Joe Rundle, head of trading at ETX Capital,
    The recent slide on the FTSE 100 has seen it drop through
its 20-, 50- and 100-day simple moving averages in a significant
sign of weakness, analysts say.
    "The FTSE is looking much more bearish recently... The
warning signs are there that we may be about to see a bigger
correction," Alpari analyst Craig Erlam said. 
    Should the index breach its 200-day moving average, at
6,685, the next significant support does not kick in until about
6,507, the April lows, he said.
    Shares in drugmaker Shire, which has rejected a $51
billion bid from AbbVie, gained 0.6 percent after the
chief executive of Botox maker Allergan said he was
looking at potential large acquisitions.
    Allergan looked at Shire in the past as a takeover target
but the approach never got anywhere, Reuters reported earlier
this year.
    Allergan boss David Pyott told the Wall Street Journal and
Financial Times he had been urged by shareholders to consider
deals as he fights his own battle against Valeant
Pharmaceuticals, which wants to buy Allergan for $53
    London Stock Exchange topped the fallers' list, off
2.2 percent. Sovereign wealth fund Qatar Holding sold 260.1
million pounds ($443 million) of LSE shares at 1,915 pence each,
a source familiar with the matter said.
    ($1 = 0.5877 British Pounds)

 (Additional reporting by Ben Hirschler, editing by John
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