Why did ASOS shares fall despite great results?
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ASOS(LSE:ASC) is a big-name UK retailer. As well as selling branded clothing on its website, it also sells own lines, mainly targeting young adults. Given the powerful online presence and distribution network it has, the pandemic has been good for business. But after the announcement of stellar half-year results yesterday, ASOS shares actually fell. What’s going on here?
Positive results
ASOS shares closed Wednesday just below 5,800p, but closed yesterday just above 5,600p. As I write, the shares are down another 4% today. Usually I would note such a move in line with a disappointing set of results. But the results were quite the opposite.
2 unloved FTSE 100 stocks I’d buy before it’s too late
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As the UK moves out of lockdown and the economy’s wheels begin to turn a little quicker, the FTSE 100 has gained a boost and has tracked upwards quickly from the start of April. Good news for the broader economy, however, does not always equate to good news for individual companies.
I’ve pulled out two Footsie companies that have had a difficult time of late but, as a result, may represent an opportunity for me to buy. I will personally be following their progress closely to make the most of their lower cost before a potential rise.
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It might not surprise our regular readers that the top performing funds of the first quarter of this year were focused on the UK and small caps. And the topmost on the intersection of the two.
Britain has organised a strong vaccine rollout, and despite some debate about the speed of reopening allowed to businesses – particularly compared to the other frontrunner, the US – investors are betting that its companies have been given a headstart.
That has been benefiting the more domestically focused FTSE 250 rather than the more global FTSE 100. But it is small caps both here and abroad that are set to reap the biggest benefits from the recovery, being nimble and full of rapid growth potential.
The FTSE 100 index: next stop 8,000? Image source: Getty Images
The
This week, the
FTSE 250 hit an all-time high as investors rushed to buy into the UK’s improving economic outlook. I think this optimism could spill over into the FTSE 100 as the global economy starts to recover from the coronavirus crisis.
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FTSE 100 index composition
Unlike the FTSE 250, the FTSE 100 is more of an international index. More than 70% of its profits come from outside the UK. That means the index is more of a barometer of global economic health rather than UK economic activity.