FTSE 100 down, as retail sector shaken by ASOS profit warning

FTSE 100 down, as retail sector shaken by ASOS profit warning

ASOS shares sink 40%

Retail gloom hit London markets on Monday, after online retailing giant ASOS PLC cut its full-year outlook, sending its rivals into the red.

Mining companies led the heavy-weight gainers.

How are markets trading?

The U.K.’s FTSE 100 UKX, -0.57% declined almost 0.2% to 6,832.95, after finishing up 1% last week.

The pound GBPUSD, +0.2702% was up against the dollar at $1.2618 on Monday, from $1.2583 late Friday in New York.

What is driving the markets?

Shares of U.K. fashion retailers were down Monday morning after ASOS ASC, -39.32% warned of difficult November trading and cut its full-year outlook. Shares of ASOS, which list on London’s Alternative Investment Market of smaller companies, plummeted by 40% after the profit warning, helping send the shares of its rivals into the red.

After Friday’s sharp losses, notably on Wall Street, global equity action was markedly calmer. Investors will be looking to the U.S. Federal Open Market Committee policy meeting on Wednesday, where investors are expecting another interest-rate hike, but hoping for a dovish message.

The Bank of England will also hold its own policy meeting on Thursday, but isn’t expected to announce any changes to interest rates given the uncertainty surrounding Brexit. U.K. Prime Minister Theresa May is reportedly pushing back on the idea of a second referendum over Brexit, as she fights to keep her exit deal alive.

Mining stocks may be all ears for China’s annual Central Economic Work Conference that starts Tuesday. The government will set out policy direction and could announce stimulus for an economy that has shown signs of sagging.

What stocks are active?

On the heels of a slump for ASOS, shares in its major competitors also felt the heat. Boohoo Group PLC BOO, -12.87% dropped by 9.5% and Quiz PLC QUIZ, -18.52% shares were down 15%. While Marks and Spencer Group PLC MKS, -4.82% and Next PLC NXT, -6.43% both lost 4%.

Mining heavy-weights were among the biggest gainers on Monday, with BHP Group PLC BHP, +2.75% up 3% after announcing it purchased 5% of its stock in a $5.2 billion buyback, funded by the sale of its U.S. shale unit. Glencore PLC GLEN, +1.43% was up just under 2%, Rio Tinto PLC RIO, +1.96% gained almost 2% and Anglo America PLC AAL, +0.99% jumped 1%.

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