Miners lift UK’s FTSE 100 to new 20-month highs, Burberry slides

UK’s blue-chip index hit fresh 20-month highs on Thursday as miners bounced on relief that property developer China Evergrande averted a default, although a slew of disappointing updates from retailers cast gloom on the sector.

Luxury brand Burberry fell 6.1% after it said sales in regions such as Europe and Japan remained under pressure from reduced tourist levels, even as it exceeded quarterly profit expectations.

Discount retailer B&M dropped 6.4% after posting lower first-half core earnings.

The FTSE 100 index still rose 0.3% in morning trade, helped by China-exposed mining stocks, after China Evergrande averted a destabilising default at the last minute for the third time in the past month. Precious metal miners added 3.0%.

Data showed Britain’s economy grew by 0.6% in September, beating estimates and gaining some steam at the end of the third quarter, but estimates for previous months were revised lower.

“It’s surprising that FTSE opened higher, given the lacklustre GDP numbers painting a picture of UK sputtering in its economic recovery and supply chain issues still causing problems for many sectors,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown (LON:HRGV).

“The uptick is because with sluggish growth amid higher inflation, there are expectations that BoE won’t raise rates in really quick succession.”

In comparison to its European and U.S. peers, the FTSE 100 has underperformed in post-pandemic recovery this year, hurt by global supply chain problems, surging energy prices, post-Brexit shortages of labour and inflationary worries.

Oil major BP (LON:BP) fell 1.1% after it and Norway’s Aker jointly sold a 5% stake in Norwegian oil firm Aker BP, cutting their combined holding in the company to 65%.

Johnson Matthey (LON:JMAT) tumbled 15.2% after announcing plans to exit its battery materials business and the departure of its chief executive.

Online car marketplace Auto Trader Group Plc was the top gainer on the FTSE 100, surging as much as 10.3%, after it reported its highest ever half-year revenue and profit.