FTSE 100 drops as a stronger sterling hurts export-focused companies; Burberry soars

The UK's FTSE 100 fell on Friday as a rise in sterling hurt firms that export. Burberry, however, soared, after a strong U.S. Holiday season helped the luxury company beat its quarterly sales targets.

The blue-chip FTSE 100 fell 0.3% at 1214 GMT but was still on track for its fifth consecutive week of gains.

The benchmark reached a record-high this week as global stocks surged amid signs that U.S. president Donald Trump is taking a more lenient stance on tariffs against China, and is looking to boost the U.S. economic growth by lowering taxes and investing heavily in artificial intelligence.

The dollar fell 0.5% on Friday due to the lack of concrete policies on tariffs during Trump's initial week as president. This in turn weighed down on the shares of global companies like Shell and HSBC.

Copper prices rose to their highest level in over two months, boosting the UK-listed global mining companies Antofagasta and Glencore. This was due to hopes for a U.S.-China trade agreement.

The FTSE 250 midcap index gained 0.3%, boosted by a 13% surge in Burberry shares after it reported a smaller-than-expected 4% drop in quarterly comparable store sales and said it was now more likely to record a profit over its financial year.

Kering, LVMH and other luxury European firms saw their shares rise as a result.

Bloomsbury Publishing, the publisher of Harry Potter, rose by 3.8% following a renewed supply agreement with Amazon.

A survey revealed that the Bank of England's (BoE) challenge is a tepid, but still growing, growth in British business. Employment and optimism declined again, while prices increased.

The survey is the latest indication of a lackluster economy and a weakened jobs market after Finance Minister Rachel Reeves increased payroll taxes in her budget for businesses on October 30.

The next time the BoE policymakers gather, on February 6, traders expect a rate cut of 25 basis points. (Reporting and editing by Devika Syamnath in Bengaluru)

(source: Reuters)