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FTSE 100 gains but Dixons Carphone weighs on British mid-caps
August 24, 2017 / 9:21 AM / 3 months ago

FTSE 100 gains but Dixons Carphone weighs on British mid-caps

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* FTSE 100 up 0.4 pct, mid caps down 0.2 pct

* Provident Financial, WPP rebound after sell-off

* Financials, miners support blue chips

* Dixons Carphone sinks after profit warning

By Kit Rees

LONDON, Aug 24 (Reuters) - Britain’s top share index rose on Thursday as shares in Provident Financial and WPP regained some lost ground, but a profit warning sent Dixons Carphone tumbling.

The blue-chip FTSE 100 index was up 0.4 percent at 7,408.11 points by 0903 GMT, in line with broader gains on European equity markets.

Britain’s mid-caps weren’t as bouncy. The FTSE 250 was down 0.2 percent as shares in the electronics retailer Dixons Carphone sank more than 26 percent after it cut its full-year profit forecast. The shares were on track for their worst day since January 2012.

“Dixons Carphone stoked fresh fears about the health of the UK retail sector with a profits warning amid a tough mobile phone market and lower earnings from its software division,” Neil Wilson, senior market analyst at ETX Capital, said in a note.

“After the Provident Financial collapse, another profits warning is probably the last thing the City needs right now,” Wilson said.

Among blue chips, UK subprime lender Provident Financial led gains with a 20 percent rise. It had plunged more than 66 percent on Tuesday after issuing a profit warning and saying that its CEO was leaving.

The stock has regained some ground over the past two sessions but remains down more than 73 percent year to date and is still trading at November 2010 lows.

British stocks have seen some big individual declines over the past few sessions, with advertiser WPP plunging nearly 11 percent on Wednesday after cutting its sales target for the second time in six months.

WPP’s shares rose 1.7 percent on Thursday, holding up after several brokers rushed to cut their target prices for the stock.

“U.S. ad spend might come back if Trump growth hopes are delivered, and consumer goods companies may increase spend again but structural concerns remain,” analysts at Investec said in a note.

Gains among big consumer staples firms such as British American Tobacco and Reckitt Benckiser also helped support the blue-chip benchmark, along with financials and mining companies.

Reporting by Kit Rees, editing by Larry King

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