FTSE 100 touches two-week low, Burberry weighs

Reuters

Published Nov 28, 2023 08:25

Updated Nov 28, 2023 17:17

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 (LON:RR) 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 (LON:BRBY) falling 3.3% after HSBC (LON:HSBA) reduced the luxury retailer's price target.

Pearson (LON:PSON) dropped 3.7% to the bottom of FTSE 100 after Exane BNP Paribas (EPA:BNPP) 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.