By Shashwat Chauhan and Khushi Singh
(Reuters) -Britain’s FTSE 100 closed lower on Tuesday, as shares of luxury retailer Burberry slipped following a price target cut, while gains in Rolls-Royce shares capped losses after the engineering company forecast a surge in its profitability.
The exporter-heavy FTSE 100 fell 0.1%, touching a two-week low intraday, while the more domestically-oriented FTSE 250 midcap index also shed 0.3%.
Personal goods dropped 1.7%, leading declines among the major FTSE 350 sectors, with Burberry Group falling 3.3% after HSBC reduced the luxury retailer’s price target.
Pearson dropped 3.7% to the bottom of FTSE 100 after Exane BNP Paribas downgraded the education company’s stock to “Neutral” from “Outperform”.
Rolls-Royce jumped 6.2% to a more than four-year high after the engineering company said it aimed to quadruple its profit in the next five years.
“For all its problems, Rolls-Royce is a business with some inherent strengths – most notably an installed base of engines on global aircraft on which it enjoys lucrative spares and repairs contracts,” Russ Mould, investment director at AJ Bell, said in a note.
The broader aerospace and defence sector added 2.1% on the news, clocking biggest daily gains in seven weeks.
Precious metal miners led market sectors with a 2.3% gain as gold prices continued benefitting from a retreating dollar and expectations that the U.S. Federal Reserve has finished hiking interest rates. [GOL/]
Despite recent weakness, both the benchmark stock indexes eye monthly gains as sentiment improved on hopes of a softer monetary policy globally, with rising bets that interest rates have peaked.
Meanwhile, Bank of England interest-rate setter Jonathan Haskel said the inflationary heat that remained in Britain’s labour market suggested there was no way to cut interest rates any time soon.
EasyJet reported 2023 earnings slightly ahead of analysts’ expectations after a year of robust travel demand and forward bookings.
The British carrier climbed 4.0%, to the top of FTSE 250, while the overall travel and leisure subindex rose 0.2% on the news.
(Reporting by Shashwat Chauhan and Khushi Singh in Bengaluru; Editing by Sonia Cheema, Rashmi Aich and Tomasz Janowski)
