January 15, 2014 / 9:27 AM / 4 years ago

FTSE climbs to 2-1/2 month highs, led by Burberry

* FTSE 100 up 0.3 pct, gains for 4th straight session

* Burberry soars on strong Christmas sales

* Index seen at 6,820 near-term - Charles Stanley

By Tricia Wright

LONDON, Jan 15 (Reuters) - Britain’s top share index rose to 2-1/2 month highs on Wednesday, led by a steep rise Burberry as investors welcomed a robust trading update from the luxury brand.

Investors are watching corporate updates for clues as to the likely strength of the quarterly reporting season, and whether it will justify high valuations after a bumper 2013.

Signs of an upturn in the global economy, which has experienced a long and sluggish recovery following the financial crisis, are boding well for company earnings, traders say.

As such, the World Bank has just raised its forecast for global growth for the first time in three years.

Burberry jumped 5.8 percent after it unveiled a 14 percent rise in underlying retail revenue in the Christmas quarter.

The 158-year-old seller of raincoats and leather goods said it made 528 million pounds ($869.1 million) of retail revenue in the three months to Dec. 31. That compared to analysts’ average forecast of 520 million pounds.

“Obviously the headline beat gives them their initial move up, but what they’ve done is got their mix of online and offline right... I would buy it and I think it will probably make new highs this year,” Joe Rundle, head of trading at ETX Capital said, adding that 1,700 pence, near last year’s peak, was his initial target.

“I don’t think it’s going to be a stellar earnings season but I think it’s definitely going to show positivity... The world economy is improving and... I think the markets are a buy.”

The FTSE 100 was up 22.60 points, or 0.3 percent, at 6,789.46 points by 0902 GMT, on course for its fourth straight session of gains, having received a boost on Tuesday when forecast-beating U.S. December retail sales offset concern sparked by last week’s disappointing U.S. jobs report.

Charles Stanley analyst Bill McNamara said that while the latest rally has added only around 1 percent, the “impression is that the UK index is starting to find its feet” after a tentative start to the new year.

“Overall, the technical picture remains supportive of the rally and a test of (the October high, at 6,820) looks like a realistic short-term expectation,” he said.

Stocks trading without the attraction of their latest dividend, namely Ashtead, Imperial Tobacco and Next, clipped 3.39 points from the index on Wednesday.

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