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Asos profits hit by fashion price-cutting


U.S. stocks fell sharply Friday, ending the week on a bleak note and sending the Dow Jones Industrial Average into correction territory after a batch of weaker-than-expected economic data out of China and Europe sparked fresh worries about the state of the world’s second-biggest economy and prospects for global growth. The Dow fell 2%, to end at 24,100.51. The S&P 500 index shed 1.9%, to close at 2,599.95. The Nasdaq Composite Index dropped 0.8%, to finish at 6,910.66.

European markets also fell Friday, the Stoxx Europe 600 declined 0.6% to finish at 347.21. The German DAX fell 0.5% to 10,865.77, and the French CAC 40 shed 0.9% to 4,853.70 The FTSE 100 dropped 0.5% to 6,845.17.

Risk holds steady as we begin the new week

On Friday, weak Chinese data set off worries about further slowdown in global trade and that saw equities and risk have a tough time in trading. But as we start the new week, things are looking a lot calmer so far.

Japanese stocks are among the leaders in the region but no doubt sentiment is still looking rather cautious more than anything else. And that’s largely reflected in the mild gains seen in Chinese equities.

It’s very much a given that we’re seeing some progress on the US-China trade front at this point, so investors need some other catalyst if they are to stir up a rally as we close out the year. The big event to watch out for that will be the Fed decision on Wednesday.

Online fashion retailer Asos has warned of lower profits this financial year after "unprecedented" discounting hit its trading in November.

After reports of dismal High Street activity last month, the Asos warning indicates the pain is spreading online.

The firm said cutting prices to match rivals had not shifted more clothes.

In fact, economic uncertainty plus weaker consumer confidence had led to "the weakest growth in online clothing sales in recent years".

Asos shares fell 35% in early trading.

Chief executive Nick Beighton said the fashion industry was currently experiencing an "unprecedented level of discounting, something I’ve not seen before".

In a conference call with industry analysts, he said consumer confidence was "fragile".

Despite sales growth of 14% from September to November, Asos saw "a significant deterioration" in November.

It had previously forecast sales growth of 20-25% in the year to August 2019. However, it now expects just 15% growth.

Its anticipated profit margin was also revised down, from 4% to 2%.

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