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(Alliance News) - Stock prices in London are seen opening lower on Friday, as coronavirus weighs on investment, diverting instead to safe-haven assets.
In early company news, blue-chip airlines IAG and easyJet warned on softening demand amid the spread of the virus in Europe, while Rolls-Royce reported improvement in financial performance following major engine repairs.
IG futures indicate the FTSE 100 index is to open 265.50 points, or 3.9%, lower at 6,530.90. The FTSE 100 index closed down 246.07 points, or 3.5%, at 6,796.40 on Thursday.
"After equities in London and Frankfurt slid past 3%, Wall Street crashed 4.4% and Nasdaq plummeted 4.6%," said Swissquote Bank Senior Analyst Ipek Ozkardeskaya.
"So, the rush to safety continues with capital feeding into US Treasury markets, the yen and the Swiss franc. But gold is left behind the safety rally, as the precious metal slid with equities on Friday," added Ozkardeskaya.
Gold was quoted at USD1,632.51 an ounce early Friday, lower than USD1,655.10 late Thursday. Brent oil was at USD50.78 a barrel, down from USD51.32.
Against the yen, the dollar was trading at JPY108.86 early Friday in London, down from JPY110.58 late Thursday.
The pound was quoted at USD1.2882 early Friday, firm from USD1.2867 at the London equities close Thursday. The euro was at USD1.1005 early Friday, firm from USD1.0984 late Thursday.
On the LSE, International Consolidated Airlines Group delivered "good" 2019 results despite higher fuel prices hurting its operations during the year.
The British Airways parent company reported revenue growth to EUR22.47 billion year-on-year from EUR21.40 billion, but pretax profit fell to EUR2.28 billion from EUR3.49 billion amid higher employee, fuel, engineering and finance costs.
Group capacity, measured in available seat kilometres, grew by 4.0% to 337.75 billion from 324.81 billion the prior year. Group traffic, measured in revenue passenger kilometres, rose by 5.6% to 285.75 billion from 270.66 billion reported in 28.
IAG - which also owns Spanish carriers Iberia and Vueling, Level in Austria, and Irish airline Aer Lingus - reported record load factor of 82.6%, 0.7 point higher than in 2018.
However, IAG warned that it is currently experiencing demand weakness on Asian and European routes resulting from the cancellation of industry events and corporate travel restrictions due to corovnavirus.
Budget airline easyJet also warned on coronavirus, saying that it has seen "significant" softening of demand and load factors into and out of its northern Italian bases. As a result, the company said it is planning to cancel some flights, particularly those into and out of Italy, while continuing to monitor the situation and adapting its flying programme to support demand.
Rolls-Royce said it had a "good" end to 2019 after a "challenging" first half, with revenue rising by 5% to GBP16.59 billion from GBP15.73 billion in 2018. The aircraft engines manufacturer is paying a 11.7p dividend for 2019, unchanged year-on-year.
In the first half of 2019, Rolls-Royce experienced problems with the Trent 1000 TEN jet engine, and fixing those took longer than expected. The aerospace firm had been forced to launch a major maintenance and repair programme after discovering the high-pressure turbine blades on the engine deteriorated faster than anticipated.
Looking ahead, Rolls-Royce said it expects to report underlying operating profit growth of about 15% in 2020. In 2019, this measure rose by 25% to GBP808 million.
"The momentum we gained in 2019 underpins our confidence for the year ahead," said Chief Executive Warren East.
London Stock Exchange Group reported "strong" financial performance in 2019, with revenue up 8% to GBP2.06 billion, as it continues to develop innovative services "in a range of areas".
The stock exchange operator believes the proposed acquisition of Refinitiv will further accelerate its growth, adding data, analytics and multi-asset class capital markets capabilities.
LSE proposed a final dividend of 49.9 pence a share, resulting in a 16% increase in its annual payout to 70.0p.
Looking ahead, LSEG said it remains "well-positioned" for future growth and intends to make further investments in the business, while also controlling costs.
In Asia, the Nikkei 225 index in Tokyo and Shanghai Composite in China both closed down 3.7%. The Hang Seng index is down 2.9% in late trade.
Nigeria on Friday announced the first confirmed case of the novel coronavirus in sub-Saharan Africa.
The case is an Italian citizen who works in Nigeria and returned from Milan earlier this week, Health Minister Osagie Ehanire said in a statement on Twitter.
"The patient is clinically stable, with no serious symptoms, and is being managed at the Infectious Disease Hospital in Yaba, Lagos," Ehanire said.
Italy has become a hotbed of infection in recent days, with the largest outbreak in Europe.
The economic events calendar on Friday has Germany unemployment and inflation data at 0855 GMT and 1300 GMT respectively In the afternoon, there are US personal consumption expenditure figures at 1330 GMT - the core reading is the Fed's preferred gauge of inflation.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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