Markets: Stocks to watch at the open

Global airline travel profits are forecast to fall, while financials are likely to take a hit.

Qantas Airways and Virgin Australia Holdings

The International Air Transport Association has revised down its global forecasts, and is now tipping profit from airline travel will fall from $US12.7 billion to $US11.7 billion this year.

Qantas and Virgin have climbed 25 per cent and 14 per cent respectively since falling to recent lows on news of disappointing profit results. The gains are the result of achieving synergies with industry partners as they attempt to position themselves in key markets.

But the IATA forecasts could make investors jumpy, especially as Qantas and Virgin have struggled with consistent profitability.

The forecast airline performance is weaker than expected in light of the Syrian crisis. Disappointing growth in key emerging markets and rising oil prices are also driving forces behind the revision.

Financials

Financials were one of the hardest hit sectors across international markets yesterday and Australia’s favourite investments could be in investors’ sights today. 

Despite bank debt now being seen as safer than the debt of industrials in the US, investors are concerned about fading bank earnings and what that means for equity prices. Also adding to the slide is the potential political fight over the budget.  

Financials lost 0.95 per cent on the Dow Jones, 1.45 per cent on the S&P 500, 1.01 per cent on the FTSE 100 and 0.91 per cent on the Hang Seng.

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