UPDATE 2-Burberry leads FTSE 100 higher, mid-caps glide over sterling slip

  • Reuters
  • Forex News
UPDATE 2-Burberry leads FTSE 100 higher, mid-caps glide over sterling slip
Credit: © Reuters.

* FTSE 100 up 0.6%, FTSE 250 up 0.4%

* Burberry near one-year high after upbeat first-quarter update

* Pound sinks as Brexit worries mount

* Airlines up as 737 MAX delays expected to ease over-capacity

* A.G.Barr tanks after profit warning (Adds news items, analyst comment, graphic, updates to closing prices)

By Shashwat Awasthi

July 16 (Reuters) - London's main index rose on Tuesday as Burberry scaled an 11-month high after its first-quarter update showed new designs boosted sales, and a weaker sterling aided exporter stocks, while mid-caps rose in a rare break from the domestic currency.

The FTSE 100 .FTSE added 0.6%, its best day in nearly 2 weeks, outperforming the broader European markets.

Gains in easyJet EZJ.L and Aston Martin AML.L helped the domestically-focused FTSE 250 .FTMC advance 0.4%, despite a hit to the local currency from mounting Brexit jitters.

Luxury brand Burberry BRBY.L jumped more than 15% on its best day ever, after it posted a stronger-than-expected rise in first-quarter comparable-store sales and affirmed its annual forecast. big question facing Burberry has been to what extent the Chinese consumer is reining in their luxury buying ... Not so much, it seems," Markets.com analyst Neil Wilson said, as the company's revenue growth in China and across Asia improved.

Airline stocks climbed after Ryanair RYA.L said deliveries of Boeing's BA.N 737 MAX planes may be delayed further, raising the prospects of easing over-capacity in the European market. just that reduced capacity is what is required for the industry - improved pricing environment which should be supportive of margins," Wilson said.

Shares in Europe's largest budget carrier, which cut its forecast for growth in traveller numbers next summer, and British Airways owner IAG ICAG.L gained 2.6% each.

EasyJet EZJ added 5.4% and was the biggest boost to the FTSE 250. Luxury automaker Aston Martin AML.L advanced 7.6% after a rating upgrade from Jefferies and a bullish view from Goldman Sachs (NYSE: GS ). mid-cap index has broken ranks with sterling, defying its positive correlation with the UK's domestic currency. The index is up 12.3% this year while the pound has slipped 2.7%.

The currency slumped on Tuesday to a 27-month low against the U.S. dollar amid increasing concerns of a chaotic, no-deal Brexit. operator Thomas Cook (NS: THOM ), whose shares lost more than half their value last week, surged 11%. Wilson cited this to speculation that its proposed rescue deal with Fosun Tourism 1992.HK , which would significantly dilute the stakes of other shareholders, may not go through.

Mid-cap A.G.Barr BAG.L lost more than a quarter of its value on its worst day ever, after the Irn-Bru maker warned that its annual profit would sink 20% compared with last year. soft-drink makers Fevertree FEVR.L , Britvic BVIC.L and Nichols NICL.L fell between 1.3% and 3.6%.

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