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(Sharecast News) - London's FTSE 100 was down 1% at 10,703.21 in afternoon trade on Wednesday.
Burberry slumped as HSBC downgraded its stance on the luxury fashion brand to 'hold' from 'buy' and slashed the price target to 1,200p from 1,350p as it took a look at global luxury goods.
The bank said Burberry's turnaround has progressed well, but there is not much scope for upwards sales and earnings revisions from here. It pointed out that the shares have already risen around 51% since November 2024 (versus the FTSE 100 index up 35%) when chief executive Josh Schulman did his first strategic presentation.
It argued that going forward, the aspirational consumer will continue to struggle in luxury's key China market and potentially in the US, due to the K-shaped economy.
"This softer consumer spending should impact Burberry, given the aspirational gearing of its price points, and given the global retail comparable basis gets progressively tougher in the next three quarters," HSBC said. "We believe that September accounts for a good portion of the coming quarter's sales too. The brand is also less seasonal than Moncler (which we keep on a Buy); combined with the challenging macro environment, this offers investors limited visibility into H2."
On the upside, BP and Shell gushed higher as Brent crude topped $100 a barrel for the first time since 24 July amid escalating tensions between the US and Iran.
Aberdeen rallied as it appointed Torbjörn Magnusson as chair-designate with immediate effect. He succeeds Douglas Flint, whose departure was announced last year.
Utilities SSE, British Gas owner Centrica, Severn Trent and National Grid were all on the front foot.
Dan Coatsworth, head of markets at AJ Bell, said: "Utilities were in demand as investors sought to add something stodgy to their portfolio in case of a market correction."
FTSE 100 - Risers
Computacenter (CCC) 5,265.00p 1.94%
BP (BP.) 560.60p 1.91%
Abrdn (ABDN) 251.40p 1.70%
SSE (SSE) 2,427.00p 1.55%
Metlen Energy & Metals (MTLN) 47.98p 1.01%
Centrica (CNA) 153.85p 0.95%
Severn Trent (SVT) 2,956.00p 0.89%
National Grid (NG.) 1,156.00p 0.87%
Shell (SHEL) 3,530.50p 0.83%
Sainsbury (J) (SBRY) 340.90p 0.71%
FTSE 100 - Fallers
Autotrader Group (AUTO) 488.70p -4.39%
Burberry Group (BRBY) 1,051.50p -2.90%
Melrose Industries (MRO) 485.50p -2.53%
3i Group (III) 2,718.00p -2.47%
Games Workshop Group (GAW) 17,610.00p -2.43%
Anglo American (AAL) 4,216.00p -2.33%
Barclays (BARC) 486.65p -2.16%
London Stock Exchange Group (LSEG) 8,522.00p -2.16%
Coca-Cola HBC AG (CDI) (CCH) 4,498.00p -2.14%
Rolls-Royce Holdings (RR.) 1,447.60p -2.13%
