FTSE 100 slips ahead of BoE decision, ASOS tumbles on weak sales
Reuters
Published May 10, 2023 08:38
Updated May 10, 2023 17:15
By Johann M Cherian and Sruthi Shankar
(Reuters) -Britain's top equity index slipped on Wednesday as strength in sterling weighed on dollar earners such as Unilever (LON:ULVR) ahead of the Bank of England's policy decision on Thursday, when it is seen raising interest rates further.
The blue-chip FTSE 100 closed down 0.3%, with global companies such as Unilever, AstraZeneca (NASDAQ:AZN) and Diageo (LON:DGE), that draw a large part of their revenue overseas, falling about 1% each.
Sterling rallied to a one-year high versus the dollar before shedding gains. The BoE is expected to hike rates by 25 basis points to 4.5%, the highest level since 2008, with some traders betting on further rate rises. [GBP/]
Further denting the mood, ASOS (LON:ASOS), one of the pioneers of online fashion retailing, slumped 23.3% as it swung to a first-half loss, hit by a squeeze on household budgets and forecast a further drop in sales.
The stock recorded its biggest percentage decline in more than 10 months and weighed heavily on the FTSE midcap index, which closed nearly flat.
"Sales and margins are down, net debt has ballooned and pre-tax losses are getting a lot worse. It's all very well having a turnaround plan, but at some stage you have to show results and it feels like ASOS should have been delivering the goods by now," said Russ Mould, investment director at AJ Bell.
Limiting losses however, J D Wetherspoon Plc added 5.2% after the pub group forecast full-year results to be closer to the top-end of market expectations.
Melrose Industries Plc (LON:MRON) climbed 4.8% after it said it will continue as a pure-play aerospace company post the recent spin-off its automotive unit and forecast full-year revenue in-line with analyst estimates.
Compass Group (LON:CPG) Plc gained 1.3% after the world's largest caterer raised its fiscal 2023 forecasts and announced a 750 million pound share buyback.
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Written By: Reuters
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