Sunday 22 July 2018

Dixon Carphone shares plunge on results

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt
Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt

Herbert Lash

Gains by cyclical sectors helped push European stocks higher on Thursday while heavy losses in Dixons Carphone after a profit warning dominated trading.

The pan-European STOXX 600 was up 0.2pc at its close. CRH led Irish gainers after announcing a US exit and German acquisition.

Dixons Carphone shares plummeted as much as 29pc after the mobile phone retailer downgraded expectations for full-year profit, reflecting tougher conditions in the mobile market as customers hold on to handsets for longer.

In general this quarter has seen investors harshly punish companies that missed expectations, a trend which analysts put down to slowing macroeconomic momentum.

"Expectations caught up with what have been solid fundamentals and we are at a juncture now where some macro indicators have shown signs of topping out," Carr said, pointing to dollar weakness as another headwind to European earnings.

British sub-prime lender Provident Financial added to a recovery from its sharp falls earlier in the week, jumping 13.2pc. The dollar rebounded, helped by better-than-expected US initial jobless claims, which rose 2,000 to a seasonally adjusted 234,000 for the week ended August 19.

The greenback has dropped 14pc against the euro this year, driven by dashed expectations for tax cuts and other pro-growth plans by the Trump administration, which has weakened the case for further pro-dollar rises in US interest rates.

Sterling was flat at $1.2774, its weakest since June 27. Against the euro it stabilised below a near ten-and-a-half month low of 92.37 pence hit on Wednesday. (Reuters)

Irish Independent

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