By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Rio Tinto PLC led U.K. stocks higher on
Tuesday after an upbeat production update, while shares of Burberry
Group PLC fell sharply on news its chief executive will leave to
join Apple Inc.
The FTSE 100 index jumped 0.7% to 6,554.31, putting it on track
for a four-day winning streak.
Posting the biggest gain in the benchmark, shares of Rio Tinto
(RIO) climbed 3.9%, after the mining giant said its iron-ore output
rose to a new quarterly record.
Other mining firms mirrored the strong upward move for Rio
Tinto, with shares of Antofagasta PLC up 2.8%, Glencore Xstrata PLC
(GLCNF) rising 1.6% and Anglo American PLC 3.1% higher. Metals
prices were, however, mostly lower.
Adding pressure on the index in London, shares of Burberry
slumped 5.9%, after Apple (AAPL) named the luxury-goods firm's
Chief Executive Angela Ahrendts as senior vice president of retail
and online stores.
"[It is] natural for investors to react with caution to the news
of her exit, although in truth, it's unlikely to change little at
Burberry as Christopher Bailey, the company's chief creative
officer, has been appointed to replace her in mid-2014," said Ishaq
Siddiqi, market strategist at ETX Capital.
"Investors appear to be worried that Bailey may not be able to
replicate the success of Ahrendts -- after all, he has not
previously [run] a business, especially one of that size, and
Ahrendts did transform the company [into] the luxury giant it has
become with strong growth from emerging markets, formidable digital
operations and strong group sales," he added.
Among other notable movers, shares of WPP PLC climbed 2.9% after
the advertising giant said it acquired Chinese media agency IM2.0
for an undisclosed sum.
Outside the main index in London, shares of Royal Mail PLC
gained 1.7% on the previously government-owned firm's first day of
unconditional trading. The postal service started conditional
trading on Friday and has since rallied close to 50% compared with
its initial offering price of 3.30 pounds ($5.27) a share. The
surge in share price has fueled criticism the government sold the
company too cheap, with the parliament now escalating an
investigation into the valuation.
Man Group PLC jumped 6.1% after UBS added the investment firm to
its most-preferred list.
UBS added Schroders PLC to its least-preferred list, sending the
shares 0.4% lower.
On the data front in the U.K., the Office for National
Statistics said the consumer-price index grew by 2.7% year-on-year
in September, above expectations of a 2.6% print.
"Inflation is likely to bobble around its current level for a
few months, as utility-price hikes come through, but will fall
towards the Bank of England's target [of 2%] through next year,
easing the squeeze on people's pay and putting this consumer-led
recovery on a firmer footing," said Rob Wood, chief U.K. economist
at Berenberg. "The return of productivity growth will keep
inflation under control and allow real wages to start rising again
in the second half of next year," he added.
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