Watch Burberry For a Gauge Of The Chinese Consumer: Analyst

Burberry Group PLC shares may be a better gauge of Chinese consumer sentiment than the Shanghai Composite , said Kathleen Brooks, research director at Forex.com, in a note Thursday. The British luxury-goods maker's share price and the domestic Chinese index began to diverge in February, with Burberry shares peaking "around the same time that Chinese growth turned south." At the same time, the composite has surged, "a reflection of the loosening of trading rules in China rather than a gauge of positive economic sentiment," she wrote. Burberry shares have dropped 6% over the past two sessions after the company on Wednesday cut 2016 guidance. The Shanghai Composite this year has rallied 40%.