Cotton's rally burdens international markets

With an encouraging upping, FashionUnited Top 100

hit the 1208.74 yesterday, in a day characterized by intrnational tumbles and falls within the largest stocks exchanges. With the cotton prices rallying across the Far East, it was not a surprise that the Indian quoted companies were among the worst performers of Thursday.

In India, textile companies have shown one of their best quarterly performances in the second quarter of the current financial year, due to a staggering demand for garments from both domestic and foreign markets. According to national media, around 130 textile companies which have declared their results have posted a 136 per cent jump in aggregate net profit to Rs 1,230 crore for the quarter ended September, as compared to Rs 842 crore in the same quarter of last year. The combined net sales of these companies grew 28 per cent to Rs 18,632 crore, as against Rs 14,568 crore in the same period last year.

Although these are just the hints from one country, they can be extrapolated to the neighbouring economies, broadly to the East-Asian ones. Also China, Pakistan, Taiwan and Sri Lanka are proving their strengh in terms of apparel manufacture and exportation.

Continuing with the corporate announcements, Chico's FAS Inc.'s fiscal third-quarter profit rose 27%, beating analysts' expectations, as the womens' retailer saw same-store sales climb despite huge growth a year earlier. Chico's same-store sales increased 3.1% in the third quarter following a 13% rise last year. The company said on its conference call it struggled early in the quarter because it transitioned to its fall merchandise too soon, but its performance steadily improved and October same-store sales increased 8.2%. The results sent Chico's shares soaring, recently up 7.6% to $10.84. Despite those gains, the stock is still down 23% so far this year. These figures transformed into a 9.52% rise within the FU Top 100.

In USA, stocks made a feeble bounce Wednesday after Tuesday's sharp sell-off. The Nasdaq and the NYSE composite tacked on 0.2% each. The S&P 500 was essentially flat. The Dow edged down 0.1%. Volume was sharply lower on both major exchanges. Among industry groups, retail and apparel makers advanced, essentially pulled by department stores Macy's, Dillard's and J.C. Penney that all beat quarterly profit views but only Dillard's stock got a lift as investors were underwhelmed by most other metrics.