Stocks pause for breath as concerns over US and German growth take hold; Burberry gains following trading update

<p>European markets failed to add to recent gains this morning, with the FTSE 100 just managing to cling to the 6100 level, following mixed comments […]</p>

European markets failed to add to recent gains this morning, with the FTSE 100 just managing to cling to the 6100 level, following mixed comments from Federal Reserve Chairman Bernanke last night and renewed concerns over the German economy, which weighed on sentiment.

Despite bullish comments from the Chicago Federal President regarding growth over the weekend, last night Bernanke painted a much more cautiously optimistic picture for US economic growth. He also failed to address the speculation that the central bank would start to reduce its aggressive bond purchases this year, leaving the markets feeling vulnerable. Further comments from the US Treasury Secretary, who said that the US could hit the debt ceiling between mid-February and early March, only added to negative sentiment.

Here in Europe, Germany, the so-called power house of Europe, reported worse than expected growth figures for 2012 as the eurozone crisis continues to dent demand for its exports. Growth figures came in at 0.7% for last year, below the expected 0.8% expected and significantly lower than the 3% growth reported in 2011.

Here in the UK, economic data released this morning showed that inflation remained unchanged for a third consecutive month. The CPI figure shows annual inflation remained at 2.7% due to rising gas and electricity bills being offset by reductions in air fares and petrol prices. The RPI, a wider measure, was up slightly to 3.1% from 3% with utility bill increases being the largest contributor. The data had little impact on the FTSE, which remained up 0.1%.

The FTSE has found support mainly from miners this morning as Rio Tinto surpassed its own iron ore production targets and Anglo American also launched a restructuring and cost saving programme for its troubled South African platinum operations.

Burberry also appeared on the leader board, up over 3.9% following a positive trading update. The luxury brand reported that revenues increased by 9% to £713m in the third quarter, with retail sales (which make up the bulk of sales) rising 13% to £464m.

Elsewhere, Capital Shopping Centres Group has unveiled plans to invest £25m in a rebrand and digital proposition. This includes the launching of a fashion website allowing customers to buy from a variety of retailers in one transaction, free WiFi in its centres and a change of name to Intu Properties in order to create a stronger national brand. The news has been well received by the markets and the share price has gained over 0.7% in early trading.

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