August 24, 2017 / 7:29 AM / 2 years ago

Cyclicals boost European shares while Dixons Carphone plummets

LONDON, Aug 24 (Reuters) - Gains by cyclical sectors helped push European stocks higher on Thursday, while heavy losses from Dixons Carphone after a profit warning dominated early trading.

The pan-European STOXX 600 gained 0.3 percent, in line with euro zone stocks and blue-chips.

Dixons Carphone shares plummeted up to 29 percent after the mobile phone retailer downgraded expectations for full-year profit, reflecting tougher conditions in the mobile market as customers hold on to handsets for longer.

Dixons Carphone was the worst-performing among European retail stocks so far this year, even before today’s decline wiped a third off its market value.

Results this quarter have seen investors punish companies that missed earnings expectations particularly harshly, analysts said.

Cementing index gains, the world’s third-biggest materials supplier, CRH, jumped 4.3 percent after selling its U.S. distribution business to Beacon Roofing Supply.

Sunrise Communications also gained 4.3 percent after its second-quarter net income more than doubled and Berenberg raised the stock to a “buy”.

And British sub-prime lender Provident Financial recovered slightly from its sharp falls earlier in the week, up 2.7 percent.

Simcorp dropped 13 percent, making it one of the worst-performing European stocks, after its second-quarter results missed expectations.

The earnings season in Europe was drawing to a close, with almost nine of 10 MSCI Europe companies having reported.

So far, 55 percent of results have beat forecasts and 39 percent have missed. By comparison, more than two-thirds of companies reporting in the United States topped expectations.

Reporting by Helen Reid

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