Deutsche Lufthansa AG said Thursday that it expects air travel to improve this year after narrowing its earnings losses in its fourth quarter. “We are very certain that air traffic will experience a strong upswing this year,” Lufthansa’s Chief Executive Carsten Spohr said. The German group expects average capacity to be above 70% of 2019 levels in 2022, and said bookings for the coming Easter and summer vacations almost reached pre-pandemic levels. The company, however, warned of current uncertainties, especially regarding the crisis in Ukraine, that prevent it from giving detailed targets for 2022. It expects its adjusted earnings before interest and taxes and adjusted free cash flow to keep improving this year, it said. For its fourth quarter of last year, Lufthansa booked a net loss of 314 million euros ($349.2 million), lower than the EUR1.14 billion loss it posted the year prior. Its adjusted EBIT loss also narrowed, to EUR271 million from EUR1.29 billion, it said. Revenue more than doubled in the quarter to EUR5.83 billion from EUR2.59 billion, it said.

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In contrast to previous days, the Swiss stock market fully followed the trend on neighbouring stock exchanges on Thursday. There, the unabated Russian attacks on Ukraine caused investors to continue to divest themselves of risky securities such as shares, especially as more and more companies are cutting their business ties with Russia. The SMI lost 1.7 per cent to 11,676 points. Among the 20 SMI stocks, there were only three winners with Sika, Swisscom and Givaudan. 50.76 (Wednesday: 69.13) million shares were traded. Partners Group brought up the rear with a minus of 5.6 per cent, Swiss Life fell by 3.4 per cent. Richemont (-3.1%) also fell again after the interim recovery on Wednesday; Russia is a non-negligible sales market for the luxury goods manufacturer.

European equity markets fell on Thursday as uncertainty over the Ukraine conflict and the continuing surge in oil prices continued to make investors nervous. The Stoxx Europe 600 index fell 2% to 437.4 points. In Paris, the CAC 40 and SBF 120 lost 1.8% and 1.9% respectively. In Frankfurt, the DAX 40 gave up 2.2%, while the FTSE 100 in London dropped 2.6%. Telecom Italia SpA swung to a loss in the fourth quarter of 2021 as it booked an impairment of domestic goodwill and a write-off. It said it approved an industrial plan until 2024 which includes the separation of mobile and enterprise services, and set targets for the period. TIM posted a loss of 8.64 billion euros ($9.61 billion) for the last quarter of the year compared with a profit of EUR6.05 billion for the same quarter of 2020. TIM said late Wednesday that the loss was attributable to an impairment of domestic goodwill for EUR4.1 billion and the writing off of deferred tax assets for EUR3.8 billion. Thales SA said Thursday that its orders and profit rose strongly in 2021, and guided for its sales to grow this year. The French aerospace-and-defense company posted a net profit of 1.09 billion euros ($1.21 billion) for the year up from EUR483 million in 2020. On an adjusted basis, net income stood at EUR1.36 billion, up 45%. Thales had an order intake of EUR19.91 billion, up 18% organically. “The group benefited from a particularly strong commercial momentum in the fourth quarter of 2021, especially in the Avionics, Space and Digital Identity and Security (DIS) segments,” Thales said.

U.S. stock-index futures tumbled late Thursday after reports that Europe's largest nuclear power plant, in Ukraine, was on fire after Russian shelling, raising fears of an unprecedented nuclear disaster. Dow Jones Industrial Average futures plunged about 500 points immediately after the first reports, but largely recovered and were last down less than 200 points, while S&P 500 futures and Nasdaq-100 futures fell as well. U.S. stocks edged lower Thursday as investors assessed how a recent jump in commodities prices is likely to affect inflation and the Federal Reserve's monetary policy. The S&P 500 edged down 23.05 points, or 0.5%, to 4363.49 after advancing sharply Wednesday, and the Dow Jones Industrial Average fell 96.69 points, or 0.3%, to 33794.66. Both indexes have dropped in three of the past four trading sessions. The technology-focused Nasdaq Composite Index lost 214.07 points, or 1.6%, to 13537.94. Best Buy Co. ’s sales for the holiday quarter fell from a year earlier, as reduced store hours due to labor shortages caused by the Omicron variant and supply-chain challenges disrupted operations. The electronics retailer saw sales fall to $16.37 billion in the three months ended Jan. 29, down from $16.94 billion a year ago, when homebound consumers splurged on televisions and other electronics. Analysts surveyed by FactSet were looking for $16.59 billion in quarterly sales. The Gap Inc. lost less money than expected in the holiday season and surprisingly beat analysts’ expectations with executives’ forecast for 2022, driving shares more than 15% higher in after-hours trading Thursday. Gap GPS reported a fourth-quarter loss of $16 million, or 4 cents a share, on sales of $4.53 billion, up from $4.42 billion a year ago in the holiday season. After adjusting for charges related to changes in its European businesses, the parent company of retail chains including Old Navy and Banana Republic reported a loss of 2 cents a share, after adjusted earnings of 61 cents a share a year prior.

The East Asian stock markets and also the Sydney Stock Exchange are following the weaker lead of Wall Street on Friday. The losses widened in the course of trading. Adding to the general strain of the war in Ukraine, a fire is said to have broken out at Ukraine's Zaporizhzhya nuclear power plant, Europe's largest, following Russian shelling, which authorities say has since been extinguished. In response, Britain is calling for an emergency meeting of the UN Security Council. The sharpest declines were in Hong Kong (-2.7%) and Japan's Nikkei index, which slipped 2.2 per cent to 25,982 points. At its lowest point, the index was already down 3 per cent. Market participants in Tokyo point to Japan's experience after the nuclear disaster in Fukushima as the reason for the strong reaction. In the other markets, the losses were somewhat more moderate at up to 1.3 per cent.

Despite the prospect of rising interest rates to curb inflation, US market rates fell again after the massive rise the previous day, as investors preferred safe havens like bonds in light of the situation in Ukraine. The ten-year yield fell by almost 3 basis points to 1.85 per cent.

JPM lowers the Philips target to EUR29.20 (36.40) – Neutral

HSBC lowers the BASF target to EUR 64 (74) – Hold

UBS lowers the Richemont target to CHF 159 (184) – Buy

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