Burberry warns market environment remains challenging

London open

The Footsie is being called to start the session about 10 points lower from Wednesday’s close of 6,297.20.

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Luxury retailer Burberry posted a rise in first half pre-tax profit but warned that the market environment remains challenging. For the six months to the end of September, adjusted pre-tax profit rose to £153m from the same period last year, while revenue was unchanged at £1.1bn. Reported pre-tax profit was up 9% to £155m. In addition, the company said that since the start of the third quarter, comparable sales, although volatile, have improved overall relative to the second quarter.

Interim pre-tax profits at SAB Miller fell to $2.3bn from $2.82bn. Revenues at were also down to $9.9bn from $11.3bn. EBITA fell to $2.9bn from $3.2bn. “Continued depreciation of key operating currencies against the US dollar has had an adverse impact on our results on both a translational and transactional basis. The adverse translational foreign exchange impact on EBITA in the period was $497 million, with a further adverse transactional impact on margins,” the company said.

In the press

BHP Billiton faces worsening fallout from the Samarco mine dam disaster after the Brazilian government said the Anglo-Australian mining giant could face a fine for the “environmental catastrophe”. As BHP’s share price in Australia pushed near 10-year lows on Thursday, the government in Brasilia has become increasingly concerned over the rising death toll and contaminated mud flowing through two states as a result of the disaster. - The Guardian

The European Central Bank must end its unprecedented stimulus measures in order to prevent a new financial crisis from erupting in the Eurozone, Germany's top economic advisers have warned. Berlin's Council of Economic Experts - known as the country's five "wise men" - said the ECB must consider tapering its bond-buying measures early to avoid dangerous imbalances from building up in the bloc. - The Daily Telegraph

The chronic lack of homes for sale has pushed up prices across the country for the third consecutive month. Demand from potential buyers increased in October, with 12% more respondents experiencing a rise in inquiries, according to the Royal Institution of Chartered Surveyors. The number of new instructions, which has been in decline since the middle of last year, fell for the ninth month in a row. - The Times

US close

A thinly traded Veterans Day session ended with US stock markets bowing down at the closing bell as a retreating crude price weighed on the oil majors.

Despite the major indices opening higher and enjoying a mid-session charge on the back of encouragement from Asia and Europe, by the closing bell the Dow Jones packed up its troubles 0.32% lower at 17,702.22, while the S&P 500 slid 0.32% to 2,075 and the Nasdaq 100 fell 0.1% to 4,636.94.

West Texas Intermediate slumped 2.7% to $43 a barrel, while Brent crude fell 3.25% to $45.9/bbl, sending the likes of Chevron and Exxon lower. The dollar gave up some ground in most of its major pairs.

Earlier, most Asian equity markets advanced on Wednesday, as investors took the positives from a batch of mixed data from China.