By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- Britain's benchmark stock index was
little changed Wednesday, while shares of British Sky Broadcasting
Group PLC slipped after News Corp. announced it was withdrawing its
bid to take over the firm.
The FTSE 100 index was nearly flat at 5,867.80, as other
European markets also held in a fairly tight range.
Shares of British Sky Broadcasting dropped 0.9%, paring their
intraday losses. They have fallen nearly 19% over the past
month.
News Corp. (NWSA) (NWS) announced Wednesday it no longer plans
to make an offer for the shares in BSkyB it doesn't already own,
saying "it has become clear that it is too difficult to progress in
this climate."
The announcement comes in the wake of a growing phone-hacking
scandal in the U.K. involving newspapers owned by News Corp.
"We welcome the news," said a Downing Street spokesman in an
emailed statement, responding to the BSkyB bid withdrawal. "As the
prime minister has said, the business should focus on clearing up
the mess and getting its own house in order."
News Corp. also owns MarketWatch, the publisher of this
report.
Burberry and miners
Shares of Burberry rallied 4.4% 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 for Burberry and price targets rise following
the results.
Miners were the other big climbers Wednesday as commodity prices
rose and as the latest data on Chinese economic growth came in
slightly ahead of market expectations. Silver miner Fresnillo PLC
rallied 5.1%, also buoyed by rising silver prices.
African Barrick Gold PLC climbed 5.1% as gold prices hit a
record and after the stock was upgraded to neutral from sell at
Goldman Sachs, which cited its attractive valuation.
Marks & Spencer weighs on retail sector
Marks & Spencer (MAKSY) was the worst performer within
London's benchmark index, dropping 3.5% after reporting a 3.2%
increase in total group sales for its fiscal first quarter.
Santander analyst Rebecca McClellan said that expectations for
the retailer 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 benefited 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, shares of Next PLC lost 1.3% and
Debenhams sank 2.2%.
Mid-cap fashion retailer Supergroup PLC bucked the trend,
surging 22% after it reported an 89% jump in underlying pretax
profit for the fiscal year.