Burberry gives air to luxury stocks

On Thursday Debenhams, which last month issued a profit warning, is set to give its interim

results. The retailer’s profits have been hit by snow and cold weather. Meanwhile, trading update for the first quarter pushed Burberry’s shares up to gain 8 percent in the early trading Wednesday and to be stable at trading 3.5 percent better later on.

Keith Bowman, analyst at Hargreaves Lansdown said: "Burberry has again pleased, making earlier challenges look temporary in nature. Nonetheless, with the company's Asian bias increasing and the debate over Chinese economic growth still ongoing, room for caution appears to persist."

Burberry said in the trading update that demand in Asia for its more expensive items helped boost revenues 9 percent to 1.11 billion pounds in the last six months. However, European sales were flat, while sales in the US rose lightly.

"Burberry has again pleased, making earlier challenges look temporary in nature," Hargreaves Lansdown analyst Keith Bowman said in a note Wednesday. Société Générale analyst Thierry Cota has reiterated a 'hold' recommendation on luxury fashion group Burberry (BRBY.L) following an expectation-beating set of results.

Burberry reported an 11 percent sales rise in the three months to the end of March, beating market expectations. Over six months total sales rose 9 percent in underlying terms, and the firm cut the ribbon on 10 new shops.

Angela Ahrendts, Burberry's chief executive, said 'While we expect the external global environment to remain challenging, the team is intensely focused on optimising the significant opportunities that exist for the brand across geographies and product divisions, with particular emphasis on unlocking the potential of our digital platform and our newly-integrated fragrance and beauty business.'

Shares in the group closed at 12.90 pounds on Wednesday, up 24 pence or 2 percent.

Finally and as highlighted by ‘The Guardian’, Matt Basi, head of UK sales trading at CMC Markets, said: “Equity markets took a sharp leg lower in Europe this morning, giving back early gains as rumours of a German downgrade sparked heavy selling. The market reacting so drastically to idle chatter of this nature is probably less indicative of any belief in the gossip than of the general nervousness amongst traders, as the bleak macro backdrop combines with wild commodity swings, acts of terrorism and unravelling geopolitical situations in North Korea and Israel to undermine investor confidence.”