11th Oct 2021 08:46
(Alliance News) -Â London stocks started the week on a mixed note, with Monday's economic calendar quiet but things picking up in the days ahead with key inflation readings out of the US and China.
What's more, banks will kick off the US third-quarter earnings season on Wednesday.
In London early Monday, shares in ASOS tumbled 15% after the online fashion retailer warned on profit in the year ahead and announced the departure of its chief executive.
The FTSE 100 index was up 17.24 points, or 0.2%, at 7,112.79 early Monday. The mid-cap FTSE 250 index was down 84.52 points, or 0.4%, at 22,451.65. The AIM All-Share index was down 2.55 points, or 0.2%, at 1,208.98.
The Cboe UK 100 index was up 0.2% at 706.79. The Cboe 250 was down 0.4% at 20,286.52, and the Cboe Small Companies up 0.2% at 15,552.85.
In mainland Europe, the CAC 40 in Paris was up 0.2% while the DAX 40 in Frankfurt was down 0.2% early Monday.
In London, miners were helping to bolster the FTSE 100 in early trade amid higher commodity prices, with Anglo American up 2.9%, Antofagasta up 2.4% and Glencore up 2.0%.
Brent oil was trading at USD83.77 a barrel early Monday, higher than USD83.15 late Friday and changing hands around fresh three-year highs.
"Power concerns continue to offer support to the oil market. This is a trend we are likely to see continue through the winter," said ING.
In the UK, where energy prices have shot up in recent weeks, hopes that firms could receive a major package of support to weather the energy crisis this winter faded as the Treasury denied there have been talks with the government's business department.
Business Secretary Kwasi Kwarteng said on Sunday that he is working closely with Chancellor Rishi Sunak to help industry as wholesale gas prices spiral. But a senior Treasury source insisted to the PA news agency that no such talks have taken place despite firms pleading for help to prevent further collapses.
The minister guaranteed he will keep the energy price cap for consumers in place throughout the winter but said he will not "bail out failing energy suppliers".
Gold was quoted at USD1,755.97 an ounce early Monday, lower than USD1,759.55 on Friday.
The Nikkei 225 index in Tokyo ended up 1.6%. Against the yen, the dollar rose strongly to JPY112.82 versus JPY112.03.
"The recovery in US equity futures has been driven by a very positive day for the most part in Asia, with no one theme driving the rally. The Nikkei 225 has climbed an impressive 1.55% with a much weaker Yen boosting exports, Covid-19 cases falling and the Japanese PM saying he wasn't contemplating a hike in capital gains tax," said Jeffery Halley, senior market analyst at Oanda.
In China, the Shanghai Composite closed flat, while the Hang Seng index in Hong Kong rallied 2.0%. The S&P/ASX 200 in Sydney closed down 0.3%, however.
Back in London, shares in AIM-listed ASOS slumped 15% after unveiling a board shake-up alongside its annual results. ASOS recorded a profit hike, but the fast fashion firm warned on the year ahead amid supply chain issues and other cost pressures.
Revenue for the financial year to August 31 jumped 20% to GBP3.91 billion as retail sales grew 19% to GBP3.78 billion, while pretax profit rose 25% to GBP177.1 million.
However, sales growth in the year ahead is expected to be in the range of 10% to 15%, with interim revenue growth in "mid-single digits". This reflects tougher comparables and industry-wide supply chain pressures. The company expects sales to accelerate in the second half of the year and has laid out plans to generate GBP7 billion of annual revenue over the medium-term.
Adjusted pretax profit for the 2022 financial year is expected around GBP110 million to GBP140 million. This would be well below the GBP193.6 million registered for the financial year just ended.
ASOS flagged "notable cost headwinds", including inbound freight costs, Brexit duty annualisation, outbound delivery costs and labour cost inflation. It also said financial 2021 adjusted profit included GBP67.3 million in Covid-19-rated benefit.
ASOS shook up its board to "underpin delivery of the next phase of its global growth strategy". CEO Beighton is stepping down after 12 years with ASOS, including six as CEO, and a search is underway for his replacement.
Peer Boohoo fell 2.9% in a negative read-across.
Sterling was quoted at USD1.3669 early Monday, up against USD1.3645 at the London equities close on Friday. The euro traded at USD1.1584, firm versus USD1.1578 late Friday.
While Monday's economic calendar is quiet, later this week are inflation prints from the US and China. In addition, the US third-quarter earnings season starts on Wednesday with financial firms BlackRock and JP Morgan Chase. Bank of America, Morgan Stanley and Citigroup follow on Thursday.
By Lucy Heming;Â [email protected]
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