IAG (LON: IAG) share price is having its worst day in the months amid the announcement of the UK spring budget 2023. Most UK shares dropped a lot on Wednesday as many investors tried to act prudently before the major tax changes. Consequently, the IAG stock fell by 7.3% till press time and was trading at 134.16p.
The benchmark of UK equities, the FTSE 100 index, marked its new yearly lows today. The index dropped by 210 points within the first 4 hours of the day, losing 2.72%. IAG shares are not the only airlines stock having a bad day, EasyJet, Wizz Air, and Jet2 shares also showed similar losses.
IAG Stock Falls 22% From Year Highs
International Consolidated Airlines Group (IAG) posted a profit of €431 million in 2022. This was the 1st profitable year for the British Airways owner since the start of the pandemic. This year was expected to be even more profitable for the aviation industry.
However, the profit worries are back once again, as warned by United Airlines in its latest announcement. This has triggered a sell-off in airline stocks, and hence IAG share price is also falling.
The shares had a big rally in January 2023 but started to reverse in February. Since then, the stock has fallen by 22.3%. Another major concern for IAG investors is the amount of debt on the company’s balance sheet.
IAG Share Price Forecast
LON: IAG chart reveals key insights for the traders. The shares appear to be heading for the retest of the 200-day moving average. This indicator lies another 5% below the current price at 127.93p. Below this level lies the previous higher low of 122.7p on the daily chart. I expect a strong bounce from these levels in the coming days.
In the event that the price fails to reverse from these support levels, the IAG share price forecast will become very bearish. In that case, the price can potentially drop below 100p as the next support lies at 90p. However, considering the current market structure, the bullish scenario is more likely to happen.
