UK Retail Shares: Ocado Tumbles After Issuing Profit Warnings
|
|
|
For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 19 December 2011: 11.00am Update
A quiet start to the week saw the FTSE make small gains, but it then fell back as geopolitical worries over the death of the North Korean leader caused investors to fret.
As the final week before Christmas dawns, the themes that started the year remain with us. Friday night saw the ratings agencies engage in their now-traditional end-of-week downgrade for Europe, while UK retailers are struggling once again this morning.
By 11.30am (London time), both the FTSE 100 and 250 were down 0.15%, at 5379.03 and 9789.18 respectively. European markets however were higher, with the DAX up 0.7% and the CAC up 0.45%.
Credit ratings agencies add to Eurozone woes
Moody's and Fitch did their bit on Friday to shatter the calm, issuing a series of pronouncements on the Eurozone and downgrading one of the key members of the EU.
Moody's made the most interesting move, downgrading Belgium by two notches to Aaa3, with a negative outlook.
Even though the country has finally managed to install a government, after over a year of political wrangling, the agency said that political uncertainty and deteriorating national finances made the situation precarious. In addition, increased worries about Belgium's embattled banking sector also contributed to the downgrade decision.
Meanwhile, Fitch took action on a slew of Eurozone states, putting Belgium, Italy, Spain, Ireland, Slovenia and Cyprus on negative watch. This was bad enough, but it followed up by announcing the big one, France.
Fitch said that it believed France to be most exposed to an intensification of the Eurozone crisis. They suggested that increased liabilities posed risks to the precarious state of the French national balance sheet whilst weaker economic growth would impair Paris' ability to restore debt to a more manageable level.
Of course, we are still awaiting any news from Standard & Poor's, the agency that put the entire Eurozone on negative watch two weeks ago.
Rumours swirled on Friday that Spain and Italy might be downgraded, so the Belgium decision was almost something of a relief, since Brussels' impact on the financial system is much smaller than Madrid or Rome. However, everyone knows that the real crunch point will be France; if this domino falls then 2012 will start off on a very grim note indeed.
Retailers remain under fire
Ocado and HMV have endured a very difficult year, and it doesn't look as if either of them will see their predicaments lessen in the New Year.
British icon HMV said that sales were down 11.6% like-for-like for the year to 26 October, with the company incurring a pre-tax loss of £45.7 million.
As a result, it has decided to review the status of its live events division, with a sale a likely possibility.
Ocado issued a profit warning, saying that problems at its warehouse had increased delivery times, and as a result profits would be in the region of £27.5 - 28.5 million, below the forecast of £34 million.
Ocado and HMV have spent the morning racing each other lower on the shares spread betting markets, and are currently down 9.2% at 65p and 10.8% at 3.45p respectively. Ocado floated on the stock market at 180p per share, while HMV started 2011 with its shares at 32p.
Looking ahead
No major US data is scheduled for release this afternoon, so the focus will remain Europe. At present, the Dow is expected to start up 60 points, while the S&P 500 is forecast to begin seven points higher.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
|
"UK Retail Shares: Ocado Tumbles After Issuing Profit Warnings" last update by AG, 19-Dec-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
Similar articles:
Spread Betting Daily - last update: 23-May-2012
Your daily spread betting update from the insiders. A look at the FTSE 100 and a range of other spread betting markets from Crude Oil to Shares to Gold to . . . read more Spread Betting Daily.
Spread Bets Daily Markets - last update: 22-May-2012
Spread Betting Daily News - A daily trading update from IG Index. Every weekday the experts offer their view of the markets . . . read more Spread Bets Daily Markets.
FTSE 100 Spread Betting Index Falls amid Poor Eurozone PMI Data - last update: 04-May-2012
Markets were back in risk-averse mode this morning following a string of weaker-than-expected PMI services figures from the Eurozone. By 10.45am (London time) the FTSE 100 spread betting index was 0.75% lower . . . read more FTSE 100 Spread Betting Index Falls amid Poor Eurozone PMI Data.
Spread Betting: Successful Spanish Bond Auction Sees UK Banks Rally - last update: 03-May-2012
Elsewhere in spread betting, news of the well covered Spanish bond sale seemed to bode well for UK banks, with Barclays up 1.4% to 216.6p. Lloyds and HSBC were both 1.6% higher at 32.58p and 570.2p . . . read more Spread Betting: Successful Spanish Bond Auction Sees UK Banks Rally.
Improved Chinese Manufacturing Figures See FTSE 100 Spreads Open Higher - last update: 02-May-2012
Also in spread betting, China's manufacturing sector appeared to be easing out of its downturn after figures showed that output declined at its slowest pace in the last six months. The HSBC manufacturing . . . read more Improved Chinese Manufacturing Figures See FTSE 100 Spreads Open Higher.
Substantial Q1 Profits Prompt Rally in Lloyds Spread Betting Market - last update: 01-May-2012
Lloyds spread betting market led gains in the banking sector, rallying 2.4% to 31.76p after reporting first-quarter profits that were substantially ahead of consensus forecast following a sharp decline in . . . read more Substantial Q1 Profits Prompt Rally in Lloyds Spread Betting Market.
RBS Spreads Fall as S&P Downgrade Spanish Banks - last update: 30-Apr-2012
Elsewhere in financial spread betting, the UK 100 fell 0.48% to 5749.41 this morning, breaking a four-day winning streak, as S&P's decision to downgrade 11 of Spain's largest banks revived contagion concerns. Back home, . . . read more RBS Spreads Fall as S&P Downgrade Spanish Banks.
Online Spread Betting: FTSE Edges Higher Despite Spanish Credit Downgrade - last update: 27-Apr-2012
The FTSE 100 online spread betting market seemed to shrug off renewed Eurozone concerns, gaining 0.35% to 5768 by 10.30am (London time). The blue-chip index initially fell on the open after Spain was dealt another blow to . . . read more Online Spread Betting: FTSE Edges Higher Despite Spanish Credit Downgrade.
Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits - last update: 26-Apr-2012
Drug maker GlaxoSmithKline dropped 0.4% after it reported a 13% decline in first-quarter profits, while AstraZeneca declined 5.6% after it reported a 40% drop in pre-tax profits. Unilever shares climbed 3% to 2635p after sales rose . . . read more Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits.
ARM Holdings Spreads Rally amid Stellar Apple Results - last update: 25-Apr-2012
In equities spread trading, ARM Holdings was the top FTSE 100 gainer, up 4.3%, bouncing after a lukewarm reception to in-line results from the British chip designer on Tuesday. The price gain was on the back of forecast-beating . . . read more ARM Holdings Spreads Rally amid Stellar Apple Results.
Spread Betting Daily Index - An index of Mid-Morning Daily Spread Betting Reports covering the key Index, Forex, Shares and Commodities markets.
|
|
|
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads.
Click here to sign up.
|
|
