Burberry hit hard after figures reveal fall in sales

fell into the red and dragged the FTSE 100 down with it, as investors reacted poorly to a drop in UK sales over the final quarter of 2017.

The blue chip index closed lower by around 0.4 per cent or 30.5 points at 7,725.43 points, with Burberry holding the bottom spot after tumbling 9.3 per cent or 166p to 1,619p.

The fashion house said likefor-like sales in the UK fell by a “high single-digit percentage” in the last three months of 2017, as it failed to match strong comparable figures in 2016 when a boom in tourist spending sent sales up 40 per cent as overseas shoppers took advantage of the weak pound. Overall retail revenues fell two per cent on a reported basis to £719 million.

But City Index market analyst Ken Odeluga said the fall in Burberry’s price was excessive. He said: “The decline looks like an overreaction to the group’s two per cent retail sales fall.”

Despite no major economic announcements, sterling was up 0.3 per cent against the US dollar to a new post-Brexit vote high of 1.383 – its highest level since June 24 2016. Versus the euro, sterling jumped 0.5 per cent to a one-week high of 1.130.

Across Europe, the French Cac 40 and German Dax fell 0.36 per cent and 0.47 per cent respectively.

Brent crude prices edged up 0.1 per cent to 69.36 US dollars per barrel amid signs of stronger demand and a diminishing energy glut linked to commitments by Opec and Russia to cap production.

In UK stocks, Rolls-Royce

Holdings rose 46.6p to 900p after the engine maker said a restructuring that will include cut its five operating businesses to three units – civil aerospace, defence and power systems.

The company is also beginning a strategic review of its commercial marine business which may result in a sale.

Shares in publisher and events firm Informa tumbled 42.4p to 705p amid news it will revive takeover talks with rival UBM that fell through nearly a decade ago. The move would create a company worth £9 billion.

Pearson shares fell 33.4p at 685p as investors focused on declining revenues rather than the disposals and favourable tax rates that helped the company raise annual profit forecasts.

The education group expects full-year adjusted operating profit at the upper end of its guidance at £600 million to £605m, thanks to “the further favourable outcome of certain historical tax issues”.

Shares in GKN rose 5.6p to 447.6p as the embattled engineering firm rejected a £7.4bn hostile takeover bid by Melrose Industries. GKN said the formal cash-and-stock offer was “effectively unchanged” from last week’s approach rejected for undervaluing the firm.

The biggest risers on the FTSE 100 were Rolls-Royce Holdings up 46.6p at 900p, Mediclinic International up 18.8p at 619p, NMC Health up 50p at 3,152p, and Halma up 18p at 1,307p.

The biggest fallers on the FTSE 100 were Burberry Group down 166p to 1,619p, Informa down 42.4p to 705p, Pearson down 33.4p at 685p, and Micro

Focus International down 56p at

2,175p. US stocks jumped yesterday and the Dow closed above 26,000 for the first time as investors’ expectations for higher earnings lifted stocks across sectors.

The Dow Jones Industrial Average rose 322.79 points, or 1.25 per cent, to 26,115.65, the

S&P 500 gained 26.14 points, or 0.94 per cent, to 2,802.56 and the Nasdaq Composite added 74.59 points, or 1.03 per cent, to 7,298.28.

The US economy and inflation expanded at a modest-to-moderate pace from late November through the end of 2017, while wages continued to push higher, the Federal Reserve said yesterday.

“Most districts said that wages increased at a modest pace,” the US central bank said in its periodic Beige Book report on the economy.

“A few districts observed that firms were raising wages in a broader range of industries and positions since the previous report.”

Several regional districts noted increases in manufacturing, construction, and transport costs, according to the report. Some reported expectations of further wage increases in the coming months, though prices pressures were still mixed.

The economy looks set to be in good shaper for growth for 2018, it said.

The economy would grow more than 2.5 per cent this year, fast enough to give a further push downward to unemployment, already at a 17-year-low of 4.1 per cent.