UK share prices watch: Wizz Air falls in selloff
Budget carrier Wizz Air (LON:WIZZ) has expectedly been one of today’s UK share prices to watch, with investors digesting the low-cost airline’s full-year results. Broader market sentiment, however, has been subdued today following US President Donald Trump’s comments about tariffs on Mexico, which have added to global economy fears.
Wizz Air flies lower in downbeat market
Wizz Air has fallen deep into the red in today’s session even as it posted what it referred to as “record passenger numbers and revenues”.
“We remain very optimistic for the current financial year. Higher fuel prices are supporting a stronger fare environment and we expect these macro conditions to provide Wizz Air with market share opportunities as weaker carriers withdraw unprofitable capacity,” the company’s chief executive József Váradi commented in a statement.
Proactive Investors, however, quoted UBS as noting that while the results were in line with its expectations, the guidance was slightly weaker. The investment bank left its rating on the stock at ‘neutral’ and its price target at €33.75. Wizz Air’s shares have given up more than five percent in early afternoon trading this Friday.
In blue-chip UK share prices, Legal & General Group (LON:LGEN) is marginally outperforming the broader market selloff as it announced that it had inked a deal with Allianz Holdings to offload its General Insurance business for £242 million and potential further payments. The FTSE 100 company expects the sale to increase its Solvency II ratio to increase by approximately two percent, and will reinvest the proceeds in its core business. Legal & General’s share price is about 0.8 percent worse off, compared with more than a one-percent drop in the benchmark FTSE 100 index.
Overall, investors are shunning riskier assets after President Trump tweeted last night that the US would impose a five-percent tariff on goods from Mexico to stop illegal immigrants. The comments have weighed on miners, with Antofagasta (LON:ANTO) leading the sector lower, having given up nearly three percent.
“The worry is who’s next on Trump’s list – the EU may be next,” Markets.com analyst Neil Wilson pointed out, as quoted by Reuters. “Coming at a time of a breakdown in talks with China, it’s another blow to bulls and we should consider further downside risks from escalation.”
Housebuilders meanwhile have come under pressure after data from Nationwide pointed to slowing house prices growth in the UK. Taylor Wimpey (LON:TW) is currently the sector’s biggest faller, trading more than one percent lower.
Whitbread (LON:WTB) is one of the few bright spots in the FTSE 100 index as it announced the proposed return of up to £2 billion to shareholders by way of a tender offer, as the second phase of a potential three-phase return of capital programme. The Premier Inn owner is returning capital to investors following the sale of its Costa Coffee business to The Coca Cola Company for an enterprise value of £3.9 billion. Whitbread’s shares are changing hands about 1.6 percent higher.
UK share prices in focus next week
While company results are in short supply next week, investors will have a lot to look forward to on the macroeconomic front, starting on Monday with manufacturing data, and continuing on Wednesday with composite and services purchasing managers’ indices. On Thursday, the European Central Bank is due to announce its latest policy decision.
“The pressure is mounting on the ECB now to do more – I would expect a further dovish move to tee up more easing later in the year,” Markets.com’s Wilson pointed out in a preview, as quoted by Proactive Investors, adding that with President Mario Draghi on his way out this year, the market cannot likely expect the current 2020 hike forward guidance to be removed or any new quantitative easing launched until his successor is in place.
On Friday, the US will post its closely-watched non-farm payrolls for May. Last month, the world’s biggest economy added 263,000 new jobs, while the unemployment rate dropped to 3.6 percent.
London-listed companies reporting next week include Auto Trader (LON:AUTO), CMC Markets (LON:CMCX) and Mitie Group (LON:MTO).
The upcoming reshuffle of the FTSE 100 index is also set to provide some excitement, with Marks & Spencer Group (LON:MKS) likely to be of particular interest following the recent slump in its shares. Blue-chip insurer Aviva (LON:AV) is also likely to be one of next week’s UK share prices to watch following a report in the Financial Times that it is preparing to unveil a shake-up under new chief executive Maurice Tulloch.
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