Inditex returns to post second quarter earnings and soars on the stock market
The Inditex group, owner of the Zara brand and one of the largest fashion distribution companies in the world, is beginning to recover from the impact of Covid-19 by recording profits again in its second fiscal quarter (May-July). Specifically, the company managed to turn a profit of 214 million euros compared to losses of 409 million euros in the previous quarter. However, Inditex has not managed to close the semester positively and has accumulated losses of 195 million euros.
The market has received Inditex accounts with optimism, whose shares rose about 6% on the IBEX 35 to 25.30 euros in the first hours of trading. The company already closed yesterday with a rise of 5.15%, in the wake of H&M's good results in the second quarter, which pulverized analysts' forecasts. The Swedish fashion chain closed the day yesterday with a rise of 10.79% and today it has risen around 4% on the Stockholm Stock Exchange.
Investors are welcoming signs of recovery in a sector hit hard by lockdown measures around the world as most of the physical stores have had to close.
Let's see the movements of Inditex shares on a chart:
Source: Admiral Markets MetaTrader 5. Inditex H4 chart. Data range: from May 11, 2020, to September 16, 2020. Prepared on September 16, 2020, at 10.20 am. Keep in mind that past returns do not guarantee future returns.
In the graph we can see how Inditex shares began a downward trend from the beginning of June to the beginning of August, when they reached support at 22 euros. From there they bounced and remained in a lateral trend in a range between 22.5 and 24 euros. In today's session, driven by good results, Inditex shares have managed to overcome resistance and jump to 25 euros (pink rectangle), forming a gap.
So far this year, Inditex has accumulated a fall of 19.6%, affected by the coronavirus crisis. In the past five years, Inditex has closed only two years positive: 2019 (40.7%) and 2016 (2.33%).
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