Reuters logo
UPDATE 1-FTSE 100 gains but Dixons Carphone feels the pain
August 24, 2017 / 3:58 PM / in 2 months

UPDATE 1-FTSE 100 gains but Dixons Carphone feels the pain

* FTSE 100 up 0.3 pct, mid caps down 0.2 pct at close

* Provident Financial, WPP rebound after sell-off

* Financials, miners support blue chips

* Dixons Carphone sinks after profit warning (Adds detail, updates prices at close)

By Kit Rees

LONDON, Aug 24 (Reuters) - Britain’s top share index rose on Thursday as shares in Provident Financial and WPP rallied, but a profit warning sent Dixons Carphone tumbling.

The blue-chip FTSE 100 index closed up 0.3 percent at 7,407.06 points, in line with broader gains on European equity markets.

Britain’s mid-caps weren’t as bouncy. The FTSE 250 was down 0.2 percent, as electronics retailer Dixons Carphone sank more than 23 percent after cutting its full-year profit forecast.

The shares posted their biggest daily loss since January 2012.

“Dixons Carphone stoked fresh fears about the health of the UK retail sector with a profits warning amid a tough mobile phone market and lower earnings from its software division,” Neil Wilson, senior market analyst at ETX Capital, said in a note.

“After the Provident Financial collapse, another profits warning is probably the last thing the City needs right now,” Wilson said.

Among blue chips, subprime lender Provident Financial led gains with a 13 percent rise. It had plunged more than 66 percent on Tuesday after issuing a profit warning and saying its CEO was leaving.

The stock has regained some ground over the past two sessions but remains down around 74 percent year to date and is still trading at November 2010 lows.

British stocks have seen some big individual declines over the past few sessions, with advertiser WPP plunging nearly 11 percent on Wednesday after cutting its sales target for the second time in six months.

WPP shares clambered back 3 percent on Thursday, holding up after several brokers cut their target prices for the stock.

“U.S. ad spend might come back if Trump growth hopes are delivered, and consumer goods companies may increase spend again, but structural concerns remain,” analysts at Investec said in a note.

Gains among consumer product makers such as British American Tobacco and Reckitt Benckiser also helped prop up the blue-chip benchmark, along with financials and mining companies.

Budget airline easyJet brought up the rear with a 4.4 percent fall, hit by a downgrade to “underperform” from Exane BHP Paribas, as well as by news that Germany’s Lufthansa had submitted a letter of interest for taking over parts of insolvent Air Berlin.

Reporting by Kit Rees; Editing by Larry King and David Holmes

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below