London-listed airlines have been among this Monday’s UK share prices to watch, suffering as German peer Lufthansa (FRA:LHA) warned on profits, adding to signs of turbulence in the industry. Elsewhere on the London market, Kier Group (LON:KIE) is tumbling with investors reacting negatively to the company’s overhaul plans.
Airlines fly lower after Lufthansa update
London-listed carriers are flying in the red today after Germany’s Lufthansa trimmed its financial outlook, pointing to “price deterioration in Europe caused by market-wide overcapacities and aggressively growing low cost competitors”. Shares in the German carrier are down by more than 11 percent, while at home, British Airways parent IAG (LON:IAG) has given up nearly three percent in early afternoon trade, as compared with about a 0.1-percent fall in the benchmark FTSE 100 index. London-listed low-cost carriers easyJet (LON:EZJ), Ryanair (LON:RYA) and Wizz Air (LON:WIZZ) are down by between four and six percent each.
“Shares in the airlines sector have been spooked by a profit warning from Frankfurt-listed Lufthansa. It has blamed deteriorating prices in Europe on market-wide overcapacity and rival carriers willing to accept significant losses to expand their market share,” said AJ Bell’s Russ Mould commented, as quoted by Proactive Investors. “These factors are certainly not ‘new’ news and so the fact Lufthansa is still moaning would suggest life is getting even tougher for the airlines.”
In other UK share prices to watch, Kier Group is suffering after announcing plans to sell its housebuilding and property businesses, cut about 1,200 jobs and suspend its payout to shareholders. The move came after the company recently warned on profits amid higher costs and pressures on its highways, utilities and housing maintenance businesses.
“Disposals can reduce debt and probably more importantly reduce leverage ratios,” Liberum pointed out, as quoted by Reuters, adding, however, that “events are moving fast and disposals are likely to be complicated, given the joint ventures in property and residential, they will be very dilutive”. Kier’s shares are trading nearly 16 percent lower, while the mid-cap FTSE 250 index is about 0.2 percent up.
Another prominent London-listed faller has been the Woodford Patient Capital Trust (LON:WPCT), whose shares are trading more than five percent in the red this Monday. The shares have come under pressure since fund manager Neil Woodford suspended trading in one of his flagship funds. Shares in FTSE 100 asset manager Hargreaves Lansdown (LON:HL), another stock hit by Woodford’s move, is steady with a 0.3-percent intraday gain today. The Financial Times reported yesterday that the group’s chief executive Chris Hill was forgoing his bonus of as much as £2.1 million until Woodford’s troubles were resolved.
Royal Bank of Scotland Group’s (LON:RBS) share price meanwhile is on an upward trajectory as the bailed-out lender announced that the completion of a merger between Alawwal bank and Saudi British Bank would boost its core capital. The FTSE 100 group’s shares are up by nearly two percent intraday.
Babcock (LON:BAB) is also advancing after confirming that it had received an unsolicited merger proposal from Serco Group (LON:SPR) back in January.
“The Board of Babcock, together with its advisers, carefully considered the Proposal and unanimously rejected it, having concluded that a combination of the two companies had no strategic merit and was not in the best interests of Babcock’s shareholders, customers or wider stakeholders,” the company pointed out in a statement. Babcock’s shares have gained more than four percent, while Serco’s share price is up by about 0.7 percent in early afternoon trade.
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UK share prices to watch tomorrow
In corporate releases, Ashtead (LON:AHT) is scheduled to post its fourth-quarter and full-year results tomorrow. Proactive Investors reports that despite headwinds from wet weather in North America, analysts at broker Numis believe that there is scope for the FTSE 100 group to beat its forecasts for pre-tax profit of £1.1 billion.
“Peer United Rentals has twice outlined strong trading conditions since Ashtead last reported, with commentary confirming strong growth across all geographies and verticals. Ashtead has consistently outperformed its peer on a like-for-like sales growth basis,” the analysts pointed out.
Other UK share prices to watch tomorrow are likely to include Coca-Cola HBC (LON:CCH) and Evraz (LON:EVR) which are both due to hold their annual general meetings tomorrow.
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