IAG expects to return to profit in Q2, Babcock trades in line YTD
London pre-open
The FTSE 100 was being called to open 74.3 points higher ahead of the bell on Friday after closing out the previous session a whopping 3.88% lower on Friday at 7,207.38.
Stocks to watch
Aerospace and defence firm Babcock International said on Friday that trading across the first ten months of the year had been in line with expectations, with its full-year results still set to be fourth quarter weighted.
Babcock, which kept its full-year guidance unchanged, stated it had continued to manage costs associated with Covid-19, ongoing inflation and supply chain pressures, with its new operating model on track to deliver savings of approximately £20.0m in the current financial year. However, the FTSE 250-listed firm warned that free cash flow was expected to be "significantly negative", reflecting material cash outflows - including additional pension contributions, restructuring costs, and investments in facilities and IT upgrades.
British Airways owner IAG said on Friday it expects to return to profit in the second quarter of 2022 despite recording a "significant" operating loss in the first quarter due to the Omicron Covid-19 variant, seasonal slowdown and capacity rebuilding costs.
The FTSE 100-listed company, which also owns Aer Lingus and Iberia, narrowed 2021 losses from €7.4bn to €2.7bn and stated that it expects to hit 85% of 2019's pre-pandemic capacity during the current year.
Newspaper round-up
The US Securities and Exchange Commission has reportedly opened an investigation into whether recent stock sales by Tesla CEO Elon Musk and his brother Kimbal Musk violated insider trading rules. The SEC inquiry – first reported by the Wall Street Journal on Thursday – was sparked in part by the Tesla CEO's own tweets. - Guardian
The Co-Operative Bank has more than tripled its bonus pot for bankers after a "milestone year" that resulted in its first profit in a decade. The ethical lender, which has struggled to turn a profit since 2011, announced it was paying bankers a total of £13.3m in bonuses for 2021, compared with a £4.2m bonus pot shared among its more than 3,200 staff in 2020. - Guardian
BP is under renewed pressure to abandon its stake in the oil giant Rosneft after Boris Johnson said Britain must reduce its reliance on Russian hydrocarbons. The FTSE 100 oil firm has held a 20% stake in Russia's state-owned gas company Rosneft for 10 years. - Telegraph
Alibaba has recorded its slowest quarterly growth since its listing in New York in 2014 after being hit by rising competition and a slowing Chinese economy. The world's second-largest e-commerce business behind Amazon said that its group sales had risen by 10% in the final three months of last year to 242.6bn yuan (£28.6bn). - The Times
Leading chip manufacturers have said that they are prepared for any immediate disruption caused by the Russia-Ukraine conflict to the supply of materials used to make the microprocessors that power cars, smartphones and computers. The United States remains highly dependent on the two countries for materials such as palladium and neon. Techcet, a supply chain research company that advises the world's largest semiconductor manufacturers and suppliers, said that Russia accounted for 35% of the palladium imported to America, while Ukraine supplied the majority of neon consumed in the US chip manufacturing sector. - The Times
US close
Wall Street stocks staged a late turnaround to close in the green on Thursday after US president Joe Biden announced sweeping new sanctions on Russia after the latter staged a bloody invasion of Ukraine overnight.
At the close, the Dow Jones Industrial Average was up 0.28% at 33,223,83, while the S&P 500 added 1.5% to 4,288.70 and the Nasdaq Composite saw out he session 3.34% firmer at 13,473.58.