* FTSE 100 up 0.8 pct
* EasyJet rises after Ryanair update
* Burberry slumps despite forex support
* ASOS slides but peer Next tops gainers
* Pearson extends losses
(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Alistair Smout and Kit Rees
LONDON, Oct 18 British stocks climbed on
Tuesday, rebounding from a fall the previous day as a rise for
easyJet and mining companies helped outweigh a sharp drop in
The blue chip FTSE 100 index was up 0.8 percent at
7,000.06 points by the close, underperforming a rally in other
European indexes as sterling rose.
Among the biggest gainers was easyJet, up 5.1
percent. The stock has fallen about 40 percent since Britain
voted to leave the European Union, and it issued a profit
warning earlier this month.
Investors said that there was value in easyJet after
Ryanair followed suit on Tuesday in cutting its profit
forecasts. Ryanair is down around 10 percent since the Brexit
Ryanair opened slightly lower, but ended over 4 percent up
after the airline's chief executive said he expected the
airline's sales and market share to grow in the coming months.
"easyJet is the outperformer today, having underperformed
all year compared to Ryanair. But there might now be an
improvement in earnings relative to Ryanair, so that could start
to reverse that trend," Chris Beauchamp, market analyst at IG,
Ryanair cited adverse foreign exchange effects as hitting
its profit, but supportive forex conditions for Burberry could
not help the luxury firm much.
It slumped 7.2 percent and was on track for its biggest
daily fall in more than four years after reporting results, with
analysts at Liberum citing weakness in its wholesale figures
despite a surge in sales in its home market as tourists took
advantage of a lower pound.
"There was a bit of an expectation that, if sales were flat,
the currency conversion would actually create some uptick there
in underlying earnings," Jonathan Roy, advisory investment
manager at Charles Hanover Investments, said.
"However, we've seen a bit of a slowdown in sales, which has
really negated any positive currency impact."
Burberry has rallied over 20 percent since the UK voted to
leave the European Union in June, benefiting from a drop in
sterling which makes its goods cheaper for foreign buyers.
Burberry was also joined by education publisher Pearson
, which fell 2.3 percent after several brokers cut their
price targets on the stock.
Pearson slumped in the previous session after reporting an
underwhelming set of figures, and Tuesday's fall took its losses
to more than 11 percent for this week.
British online fashion retailer ASOS fell 8.8 percent. While
its results were seen as solid, it has rallied over 100 percent
since February and hit a 2-1/2 year high on Monday in the face
of tough conditions in the UK clothing market.
Peer Next rose 5.3 percent, the top FTSE 100 riser,
after Deutsche Bank reiterated a "buy" rating on the stock.
Tesco rose 3.5 percent after it grew its market
share for the first time in five years, an indication that it is
recovering from years of turmoil.
Miners were among the biggest risers on the index, up 1.9
percent, tracking gains in the underlying price of copper, which
was supported by a weaker dollar.
The FTSE 100 ended off of its highs, hit by a rise in
sterling as inflation rose and there were suggestions that
parliament will have to ratify a British deal to leave the
European Union, possibly lessening the chances of a "hard"
Brexit which might end easy single market access when Britain
leaves the European Union.
A dip in the price of oil also saw the energy sector give up
some of its earlier gains.
(Editing by Hugh Lawson)