DFS dip in demand

on

Thursday, 15th June: DFS took a fairly bad hit after reporting that a dip in demand has caused them to warn the market of the likelihood of failing to meet prior profit expectations. As a result, their shares tumbled down 22% in the early hours of trading. The previous core earnings estimate for the full year was around the £96.1m figure, but now, the firm have admitted they are expecting a figure closer to £82m-£87m, at least 10% lower than the original estimate.

DFS weren’t the only ones who were suffering though. The FTSE as a whole opened lower this morning after the US raised interest rates by 25bp. By 08:15am, the FTSE was down 0.47% at 7439, and only six stocks were making gains, none of which were over 1.0%, and the remainder of the stocks were down. By mid-day, only three stocks were making small gains, those were; HSBC, London Stock Exchange, and Royal Bank of Scotland. The FTSE250 was similar, as only 14 stocks from the entire index were making minuscule gains, the exception being Petrofac, which was at the top, up 3.55% at 419p.

In other news, the markets were shocked to find out that three policymakers were backing an increase in interest rates, and the remaining four were backing to keep it on hold for now, making it the closest since 2007 an increase could have occurred. After this was revealed GBP/USD increased to $1.2793 from $1.2697. The fact that some of the members were backing an increase surprised the market, given the current economic situation we are facing.

The FTSE continued to drop for the day and ended down 0.74% at 7419.

Leave a Reply