Spreadex Market Update
Sports Direct loses yesterday’s gains, and then some, as it predicts 20% fall in full year profit
Having risen more than 5% yesterday thanks to news it was, among other changes, ditching zero contract hours, Sports Direct has plunged nearly 10% this Wednesday following a rather severe profit warning. The company now expects full year underlying profits to drop by 20% to around £300 million, news that was understandably poorly received by investors, especially those that had poured into the stock during Tuesday’s surprise growth. That fall is before the annual general meeting even begins, with shareholders baying for the blood of chairman Keith Hellawell (who actually offered to resign last weekend) and founder Mike Ashley.
Beyond Sports Direct there was little going on after the open. The FTSE couldn’t make any headway in recovering yesterday’s losses, investors appearing to wait for the morning’s manufacturing and industrial production figures (expected to slump to -0.4% and -0.3% respectively) before making any significant moves. The pound, meanwhile, struggled to maintain the growth that has defined the last few trading sessions, slipping by 0.2% against both the dollar (but crucially remaining above 1.34) and the euro.
With an empty economic calendar the Eurozone indices didn’t have much to do after the bell, both the DAX and CAC starting the day effectively flat. They be feeling a bit jittery ahead of tomorrow’s ECB meeting, with it currently unclear if, and by how much, the central bank will extend its current stimulus programme.
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