London close: Footsie shrugs off Burberry fall to finish flat

- Burberry sinks 21 per cent after profit warning- Markets flat ahead of 'event-risks'- Moody's says US rating at riskFollowing a morning slump, the FTSE 100 rallied in afternoon trade to finish broadly flat on Tuesday as a strong showing by banks managed to offset a heavy fall from Burberry.The German Constitutional Court said this morning that it will definitely provide its ruling on the European Stability Mechanism (ESM) and Fiscal Compact tomorrow. "European financial markets staged a mild recovery in the latter half of today's session, with traders hopeful the German constitutional court will rule in favour of the ESM tomorrow and not delay the vote, as previously feared," said market strategist Ishaq Siddiqi."The ESM is expected to get a 'yes' vote, however it should be noted that any passage by Germany may mean tough conditions for Eurozone countries who need the ESM in order to limit Germany's future liabilities."Siddiqi also highlighted several other "event-risks" over the next day or two, including debt auctions in Italy and elections in the Netherlands. However, the biggest event of all will undoubtedly be the upcoming Federal Open Market Committee (FOMC) two-day meeting in the US which begins tomorrow. Sluggish labour figures on Friday have increased hopes that the Fed may move to ease monetary policy further when the meeting concludes on Thursday. Analyst Signe Roed-Frederiksen from Danske Bank was quoted as saying today: "We expect the Fed's new purchase programme to be more gradual and conditional...It is likely to involve mortgage-backed securities, possibly combined with more treasury buying."However, ratings agency Moody's warned US politicians today that if they don't agree a way to bring down federal spending it will cut the country's prized 'AAA' rating. Back home, in his appointment hearing before the House of Commons Treasury Committee new BoE monetary policy committee appointee Ian McCafferty indicated that for him recent low readings on labour productivity are cyclical rather than structural. For economists at Barclays that implies that low productivity should not be an impediment to further monetary loosening as the inflationary consequences of stronger demand should be minimal. FTSE 100: Burberry drops a fifth after gloomy update Shares in Burberry were down around 21% after the iconic British fashion house said profits would be at the lower end of expectations this year. The firm is now taking steps to cut costs and maintain short-term profitability. While most brokers today reiterated their positive longer-term stances on the business today, they chose to downgrade their ratings on the stock, citing limited near-term visibility. Nomura, Seymour Pierce and Investec all cut their 'buy' recommendations for the shares today to adopt a more cautious view. Royal Bank of Scotland was benefiting from some upbeat comments from JP Morgan Cazenove today, which prefers the lender to sector peer Lloyds in spite of retaining its 'neutral' rating on the shares. "Although we are not negative on Lloyds, we believe that RBS now offers better value," said analyst Raul Sinha. Barclays was also performing well.Fund manager Ashmore fell after full-year pre-tax profits and assets under management took a small dip in the year to June 30th. Tullow Oil dropped after saying that attempts to find more gas at its Mbawa-1 exploration well in Kenya had met with failure. The explorer previously announced drilling at the offshore well had encountered 52 metres of net gas pay in the primary target. However, an attempt to find deeper pockets of hydrocarbons had come to nothing after drilling reached a total depth of 3,151 metres. Mining stocks were weighing heavily on the blue-chip index today with Fresnillo, Anglo American and Vedanta Resources in the red. Vedanta fell after saying that subsidiary Sesa Goa has suspended all mining operations today after Indian state Goa temporarily stopped all iron ore mining activities after a scam was uncovered. FTSE 250: IG leads risers after Q1 updateSpread betting firm IG Group rose strongly after first-quarter revenues came in line with expectations, though they were still 18% down year-on-year due to a tough comparative. Oxford Instruments, the high-tech tools and systems provider, was lower after it reported order intake from its research markets remains good, but there has been some softness in its industrial markets. FTSE 100 - RisersRoyal Bank of Scotland Group (RBS) 264.70p +4.62%International Consolidated Airlines Group SA (CDI) (IAG) 154.80p +3.27%Barclays (BARC) 213.50p +2.77%British American Tobacco (BATS) 3,182.00p +1.84%BP (BP.) 443.00p +1.19%RSA Insurance Group (RSA) 116.80p +0.95%Imperial Tobacco Group (IMT) 2,271.00p +0.93%Amec (AMEC) 1,134.00p +0.89%SABMiller (SAB) 2,720.00p +0.74%GlaxoSmithKline (GSK) 1,425.00p +0.67%FTSE 100 - FallersBurberry Group (BRBY) 1,088.00p -20.87%Kingfisher (KGF) 272.30p -3.34%Fresnillo (FRES) 1,707.00p -2.79%Ashmore Group (ASHM) 331.00p -2.56%Vedanta Resources (VED) 978.50p -2.44%Anglo American (AAL) 1,955.00p -2.32%Intertek Group (ITRK) 2,792.00p -2.10%Tullow Oil (TLW) 1,357.00p -2.09%Capita (CPI) 734.50p -2.07%Schroders (SDR) 1,482.00p -2.05%FTSE 250 - RisersIG Group Holdings (IGG) 461.70p +6.53%Talvivaara Mining Company (TALV) 149.10p +5.22%Dechra Pharmaceuticals (DPH) 579.50p +3.76%Yule Catto & Co (YULC) 172.10p +3.43%Aquarius Platinum Ltd. (AQP) 38.12p +3.11%Ultra Electronics Holdings (ULE) 1,579.00p +2.20%Bumi (BUMI) 287.10p +1.84%Dunelm Group (DNLM) 610.00p +1.75%Hunting (HTG) 878.00p +1.68%Phoenix Group Holdings (DI) (PHNX) 508.00p +1.40%FTSE 250 - FallersRuspetro (RPO) 100.00p -12.82%Hays (HAS) 77.65p -4.43%Oxford Instruments (OXIG) 1,305.00p -4.40%Moneysupermarket.com Group (MONY) 133.00p -4.32%Taylor Wimpey (TW.) 55.75p -3.88%JD Sports Fashion (JD.) 699.50p -3.32%Anite (AIE) 126.30p -2.85%Michael Page International (MPI) 375.70p -2.82%Homeserve (HSV) 231.40p -2.77%Chemring Group (CHG) 321.50p -2.75%BC