UK FTSE weakens

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FSTETrader1234 Reuters. A trader monitors the screen on a trading floor in London.

London - UK shares inched lower on Thursday as caution over earnings in the United States, where British firms have significant revenue exposure, outweighed the impact of robust domestic corporate updates.

Minutes from the last Federal Reserve meeting, which showed the US central bank was still in no rush to begin raising interest rates, helped to limit the losses.

Luxury brand Burberry posted a 12 percent rise in like-for-like retail sales for its fiscal first quarter to June 30, which traders called a very strong result.

Its shares rose of 2.5 percent.

Housebuilder Barratt Developments' stock was up 1 percent after it said it expected its full-year profit to come in at the top end of forecasts.

AB Foods, which raised its annual earnings guidance after a strong third-quarter from its Primark chain, firmed 1.2 percent.

They were among the top risers on the FTSE 100 index which, by 10:24 SA time, was down 0.1 percent at 6,713.56 points, taking its losses this week to more than 2 percent.

Traders were also mindful of the corporate earnings picture in North America, where UK blue chips derive around a quarter of their revenues.

As the second-quarter earnings season starts there, investors will be scrutinising companies' outlooks to see how they square with equity markets sitting at multi-year highs.

“I think there's just an overtone of caution in the market ahead of the US earnings season... (But) the market's rallied up a lot so it's just a case of profit-taking rather than serious concern,” Joe Rundle, head of trading at ETX Capital, said.

The recent slide on the FTSE 100 has seen it drop through its 20-, 50- and 100-day simple moving averages in a significant sign of weakness, analysts say.

“The FTSE is looking much more bearish recently... The warning signs are there that we may be about to see a bigger correction,” Alpari analyst Craig Erlam said.

Should the index breach its 200-day moving average, at 6,685, the next significant support does not kick in until about 6,507, the April lows, he said.

Shares in drugmaker Shire, which has rejected a $51 billion bid from AbbVie, gained 0.6 percent after the chief executive of Botox maker Allergan said he was looking at potential large acquisitions.

Allergan looked at Shire in the past as a takeover target but the approach never got anywhere, Reuters reported earlier this year.

Allergan boss David Pyott told the Wall Street Journal and Financial Times he had been urged by shareholders to consider deals as he fights his own battle against Valeant Pharmaceuticals, which wants to buy Allergan for $53 billion.

London Stock Exchange topped the fallers' list, off 2.2 percent.

Sovereign wealth fund Qatar Holding sold 260.1 million pounds ($443 million) of LSE shares at 1,915 pence each, a source familiar with the matter said. - Reuters



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