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Market Update

OECD Lowers Global Outlook, Ahold Profit Surges 13%

Author: Sarla Buch
Last Update: 11:24 AM ET June 01 2016

4:00 PM Frankfurt Market indexes across the euro zone declined tracking weak world markets in Asia and in the U.S. OECD lowered global growth outlook. Halfords profit dropped 4%. Ahold net surged 13% to 241 million. Wolseley revenues soared 11% to 3.7 billion and trading profit surged 18%.

Financial markets across the euro zone closed lower after the euro traded sideways and investors focused on the latest economic data from China.

The government survey in China showed factory activities across large companies barely rose in May whereas a private survey that tracks smaller companies and export focused businesses showed conditions weakened for the fifteenth month in a row.

In addition, oil traded lower marginally in the region and the U.S. consumer confidence declined according to a private survey and the Midwest region activities fell short of expectations.

Trading sentiment was also subdued after the latest report from the OECD suggested lower economic outlook for the world economies.

The Organization for Economic Co-operation and Development offered a sobering assessment on the world economic growth outlook.

The Paris-based agency dominated by wealthy nations lowered global economic growth to 3%, 0.3% lower than its previous assessment in November.

The agency also highlighted the euro zone too dependent on the central bank easing and the recovery has failed to get traction so far.

In London trading, FTSE 100 index slipped 45.66 or 0.7% to 6,184.76 and in Frankfurt the DAX index decreased 62.60 or 0.6% to 10,201.19.

In Paris, CAC 40 index dropped 31.35 or 0.7% to 4,474.30.

Halfords Group Plc plunged 6.9% to 408.20 pence after the U.K.-based automobile parts retailer said total group revenues in the fiscal year ending on April 1 rose 1.7% from a year ago to 1.02 billion.

Profit in the year dropped 3.5% from a year ago to 63.5 million compared to 65.8 million and diluted earnings per share fell 32.4 pence from 33.3 pence.

Halfords said pre-tax profit in the year after non-recurring items slumped 4.8% to 79.8 million compared to 83.8 million.

Koninklijke Ahold N.V jumped 2.9% to 20.50 after the Netherlands-based retail stores operator reported group sales in the first-quarter ending in April jumped 4.3% from a year ago to 11.8 billion.

Net income in the quarter surged 13% from a year ago to 241 million compared to 213 million and earnings per share increased to 0.29 from 0.26.

Wolseley Plc declined 5.7% to 3,821 pence after the U.K.-based heating products and building materials distributor said revenues in the third-quarter ending in April soared 10.8% from a year ago to 3.66 billion and gross margin jumped 28.4% from a year ago period.

Operating profit in the quarter surged 17.9% to 230 million compared to 195 million in the same period a year ago.

The company said net debt as of April 30 was 1.13 billion and the company purchased 252 million of its own shares.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc