London midday: Burberry, platinum stocks provide a lift

15th Jan 2013 11:26

- Burberry impresses with Q3; ARM hit with downgrades- Platinum stocks, prices rise after Amplats shake-up- US debt ceiling concerns returnStrong gains for Burberry and platinum stocks helped the FTSE 100 push into positive territory by the midday mark, although gains were limited by resurfacing concerns over the US debt ceiling.Markets have traded more or less within a narrow range over the last few days, holding on to the impressive start to 2013 on the back of the fiscal cliff agreement on New Year's Day, which lifted London's Footsie well above the 6,100 level."Overall markets and market sentiment are remaining relatively firm with intra-day weakness often being seen as a welcome buying opportunity, however it needs to be seen if this can be maintained especially with the US debt ceiling 'battle' starting to heat up," according to Markus Huber, the head of German HNW trading at ETX Capital. "Also it remains doubtful if investors are willing to show as much patience as during the run up to the fiscal cliff in December as renewed uncertainty deriving from the political stalemate in Washington is increasingly causing harm to the already still fragile economic recovery."President Barack Obama said last night that he would not negotiate with Republicans over raising the debt ceiling, declining to trade cuts in government spending in exchange for increasing the borrowing limit. The ceiling will be reached within the next month or two, according to Treasury Secretary Tim Geithner."If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama told a news conference.. "What I will not do is to have that negotiation with a gun at the head of the American people."Markets digest German GDP, Spanish auctionDampening the mood this morning has been the news that Germany reported slightly worse-than-expected growth figures for 2012 as the Eurozone crisis continues to dent demand for its exports. Berlin said this morning that the country grew 0.7% last year, below the 0.8% consensus estimate and far below the 3.0% reading from 2011. Spain appears to be taking advantage of a healthy sovereign debt market after it picked up another €5.758bn in 12- and 18-month bills today. Not only did the Treasury surpass the top-end of its €4.5-5.5bn target but it was also met with falling yields.Traders were shrugging off some upbeat comments from Bank of Japan Governor Masaaki Shirakawa who said that the central bank would pursue "powerful monetary easing" to boost the economy. Meanwhile, Federal Reserve Chairman Ben Bernanke last night downplayed fears that the current asset purchase programme would lead to higher inflation. FTSE 100: Burberry lead the risers; ARM takes a hitLuxury brand Burberry made impressive gains after saying that total revenue rose 9% to £613m in the third quarter. Retail revenue, which makes up the bulk of sales, rose 13% to £464m on an underlying basis, driven by customers choosing the more expensive items and by a strong performance in outerwear. However, wholesale revenue fell by 5% to £120m on an underlying basis in the third quarter. Bank of America Merrill Lynch upgraded its view on the firm to 'buy' this morning and raised its target price from 1,260p to 1,470p.Chip designer ARM Holdings is widely regarded as the 'best in class' in the UK tech sector, but analysts at both Morgan Stanley and Investec took the shares down a peg this morning, deciding to lower their ratings after a recent strong run. The stock, down over 4% today, has still gained around 50% in the last three months, up 70% during the past half-year. Mining giant Anglo American was in demand this morning after saying that its struggling platinum division, Amplats, is embarking on a big restructuring and cost savings programme. The plan includes cutting production by 400,000 ounces per annum after putting four unsustainable, high-cost shafts at Rustenburg on long-term care and maintenance.The news sent platinum prices to a three-month high this morning. Analyst Alison Turner from Panmure Gordon said that the Amplats review would reduce world primary platinum supply by 7% and have a positive effect on platinum prices. As such, chemicals group Johnson Matthey, the world leader in platinum distribution and the sole marketing agent for Amplats, was making impressive gains.Diversified mining giant Rio Tinto rose after managing to surpass its own iron ore production targets in 2012, while its other commodity classes also delivered large increases year-on-year. FTSE 250: Imagination and Lonmin provide a liftImagination Technologies, the chip company, was higher after saying that it has signed a further license agreement with semiconductor firm MediaTek for wireless communications and digital multimedia solutions.Meanwhile, platinum miner Lonmin was also performing well along the wider platinum sector after the Amplats review.Online grocery store Ocado was a high riser after reporting on the six trading weeks to January 6th. Gross sales rose 14.2% as the firm said that the February launch of its CFC2 distribution centre is going to plan.Bike and car parts retailer Halfords was also making gains after a strong performance at its autocentres helped to lift total sales by 1.5% in the 15 weeks to January 11th. Spreadbetting firm IG Group was in the red after reporting "satisfactory" interim results with a 21% fall in profits. FTSE 100 - RisersBurberry Group (BRBY) 1,381.00p +4.23%Eurasian Natural Resources Corp. (ENRC) 347.20p +3.95%Pearson (PSON) 1,215.00p +2.79%Johnson Matthey (JMAT) 2,295.00p +2.32%ITV (ITV) 113.80p +1.88%Associated British Foods (ABF) 1,526.00p +1.73%Xstrata (XTA) 1,192.50p +1.49%BG Group (BG.) 1,063.50p +1.48%Evraz (EVR) 285.90p +1.42%Glencore International (GLEN) 396.50p +1.21%FTSE 100 - FallersARM Holdings (ARM) 836.50p -4.18%Polymetal International (POLY) 1,110.00p -2.29%BT Group (BT.A) 240.00p -1.36%BAE Systems (BA.) 343.90p -1.35%International Consolidated Airlines Group SA (CDI) (IAG) 207.60p -1.33%CRH (CRH) 1,221.00p -1.21%Vodafone Group (VOD) 161.95p -1.16%Royal Bank of Scotland Group (RBS) 360.70p -1.04%Croda International (CRDA) 2,271.00p -1.00%Legal & General Group (LGEN) 148.50p -0.87%FTSE 250 - RisersLonmin (LMI) 348.80p +4.87%Alent (ALNT) 344.70p +4.77%Imagination Technologies Group (IMG) 455.70p +4.69%Howden Joinery Group (HWDN) 177.80p +4.34%Kenmare Resources (KMR) 35.51p +3.41%Ocado Group (OCDO) 86.80p +3.21%Taylor Wimpey (TW.) 75.35p +3.15%PayPoint (PAY) 862.00p +2.86%Lancashire Holdings (LRE) 809.00p +2.67%Pace (PIC) 214.00p +2.49%FTSE 250 - FallersJD Sports Fashion (JD.) 681.50p -5.35%Elementis (ELM) 217.30p -3.85%Victrex (VCT) 1,534.00p -3.58%New World Resources A Shares (NWR) 282.20p -3.52%Centamin (DI) (CEY) 56.75p -3.40%Dixons Retail (DXNS) 27.08p -3.22%IG Group Holdings (IGG) 455.00p -2.74%Rathbone Brothers (RAT) 1,290.00p -2.20%Fenner (FENR) 393.40p -1.63%Brown (N.) Group (BWNG) 370.70p -1.59%BC