LONDON MARKETS: Burberry Group, Miners Lead FTSE Higher

By Simon Kennedy, MarketWatch

LONDON (MarketWatch) -- U.K. stocks edged up Wednesday, led by mining companies and luxury-goods producer Burberry Group PLC, while retailers mostly dropped after a disappointing trading update from Marks & Spencer Group PLC.

The benchmark FTSE 100 index rose 0.1% to 5,876.74 in early trading, as other European markets held in a fairly tight range.

Shares of Burberry rallied 3.1% after the fashion house said underlying sales jumped 34% in the latest quarter, beating analyst expectations. Comparable store sales rose 15% excluding China, where growth was 30%, the group said.

Seymour Pierce analyst Kate Calvert described the results as "a faultless start to the year" and said she expects to see consensus earnings forecasts and price targets for the stock rise following the results.

Miners were the other big climbers Wednesday as commodity prices rose and as the latest data on Chinese growth came in slightly ahead of market expectations. Heavyweight miners BHP Billiton PLC (BHP) and Rio Tinto PLC (RIO) rose 1.9% and 1.7%, respectively.

African Barrick Gold PLC climbed 3.9% as gold prices hit a new record and after the stock was upgraded to neutral from sell at Goldman Sachs, which cited valuation after recent underperformance for the stock.

Marks & Spencer (MAKSY) was the worst performer on the benchmark index, dropping 2.8% after reporting a 3.2% rise in total group sales for its fiscal first quarter.

Santander analyst Rebecca McClellan said that expectations for the group had been rising following a relatively strong trading update from Debenhams PLC . However, she said the figures for Marks & Spencer were slightly below expectations and benefitted from one-off factors, including a strong April and an early start to sales.

"Stripping out these benefits, the trend going forward is likely to fall into negative territory," McClellan said in a note to clients.

Among other retailers, Next PLC fell 1.6% and Debenhams fell 1.1%.

Mid-cap fashion retailer Supergroup PLC bucked the trend, surging 14% after it reported an 89% jump in underlying pretax profit for the fiscal year.