Wires

Burberry leads Britain's FTSE 100 up from 1-week lows

Share

* FTSE 100 up 0.2 pct, off an earlier one-week low

* Burberry rebounds after trading update

* Some positive spin seen to Spanish downgrade

By Toni Vorobyova

LONDON, Oct 11 (Reuters) - Britain's FTSE 100 share indexedged up from one-week lows on Thursday, with concerns about theeuro zone crisis offset by signs of slightly better trading atluxury fashion house Burberry

.

A downgrade in Spain's credit rating by Standard & Poor's tojust above junk after market close on Wednesday underscored theproblems faced by the euro zone.

The news hit Spanish shares and pushed up its bond yields,but other markets saw some positivity, speculating that Madridmay now be under more pressure to formally ask for help,kick-starting the European Central Bank's bond buying rescueplan.

"It sounds like bad news, but I think there is potentially asilver lining to it in that a downgrade might force Spain to askfor a bailout so it potentially increases the chances of that,"said James Butterfill, global equity strategist at Coutts.

Britain's FTSE 100

was up 12.29 points, or 0.2percent at 5,788.00 by 0749 GMT, in jittery morning tradingwhich saw it set its lowest level since Oct. 1 before yo-yoingeither side of the no-change.

Burberry was the biggest positive weight on the index, itsshares rising 7.9 percent after the checked raincoat designer,which issued a profit warning last month, reported animprovement in trading in September.

With analysts still slashing earnings expectations, any goodnews - or simply the lack of fresh bad news - is increasinglyable to move shares higher, enabling Burberry to recover some ofthe 28 percent drop seen since the profit warning.

"The profit warning on Sept. 11 looks to have been a bitpremature," Nick Bubb, independent retail analyst, said in anote. "The retail second quarter like-for-like of plus 1 percentwas a bit better than feared, thanks to a modest pick-up in thelast three weeks of the period, reversing the negative trendseen in the two-three weeks before that."

Among the UK corporates expected to report third quarterresults, profits are on average seen down 7.5 percentyear-on-year and Thomson Reuters Starmine predicted surpriseindicator suggests that the actual figures will be slightlybetter.

That could enable the FTSE 100 to play catch up with thepan-European FTSEurofirst 300

, which is up nearly 9percent for the year-to-date against gains of 3.7 percent forthe UK index.

"In the UK, there is a greater chance of upside support tothe FTSE 100 given that it's underperformed recently,"Butterfill at Coutts said.

(Editing by Janet Lawrence)

((antonina.vorobyova@thomsonreuters.com)(+44 207 5429828)(Reuters Messaging: antonina.vorobyova@thomsonreuters.com))

((

For related prices, Reuters users may click on - *

UK stock reportFTSE index:techMARK 100 index:FTSE futures:Gilt futures:Smallcap index:FTSE 250 index:FTSE 350 index:Market digest:Top 10 by vol:Top price gainers:Top % gainers:Top price losers:Top % losers:

* For related news, click on - *

UK hot stocks:Wall Street:Gilts report:Euro bond report

Pan European stock report:

Tokyo stocks:HK stocks:Sterling report:Dollar report:

* For company prices, click on - *

Company directory:By sector:

* For pan-European market data, click on - *

European Equities speed guide................

FTSE Eurotop 300 index...........................

DJ STOXX index...................................

Top 10 STOXX sectors........................

Top 10 EUROSTOXX sectors...................

Top 10 Eurotop 300 sectors..................

Top 25 European pct gainers....................

Top 25 European pct losers.....................

))

Keywords: MARKETS BRITAIN STOCKS/