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Coronavirus effects knock easyJet and Carnival out of FTSE 100 in reshuffle

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EasyJet PLC (LON:EZJ), Meggitt PLC (LON:MGGT), Centrica PLC (LON:CNA) and Carnival PLC (LON:CCL) will drop out of the FTSE 100 later this month as part of the index’s quarterly rejig.

The quartet’s shares have been hit by the coronavirus pandemic and other challenges in recent months, which has seen their market valuations fall far outside the hundred largest companies on the London Stock Exchange. 

Index organiser FTSE Russell, which reviews and rebalances the index every three months, will confirm the changes later on Wednesday, based on closing share prices on Tuesday. 

Four demotions from the blue-chip benchmark are likely to result in promotion for cybersecurity group Avast PLC (LON:AVST), Ladbrokes owner GVC Holdings PLC (LON:GVC), DIY retailer Kingfisher PLC (LON:KGF) and home repairs insurance provider Homeserve PLC (LON:HSV).

There are also likely to be nine changes to the FTSE 250, with no relegation less surprising than for events group Hyve (LON:HYVE) as its shares have fallen more than 95% since the start of March as the pandemic laid waste to its trade shows business and triggered a rights issue.

Likewise, Senior (LON:SNR), Stagecoach Group (LON:SGC), McCarthy & Stone (LON:MCS), Marston’s (LON:MARS), Elementis (LON:ELM), JPMorgan Indian Investment Trust (LON:JII), Forterra (LON:FORT) and Bakkavor Group (LON:BAKK) all look like they will be demoted to the small caps.

The nine replacements are led by US oil producer Diversified Gas & Oil PLC (LON:DGOC), which stepped up from AIM to London’s main market in April and has completed two acquisitions during the pandemic. 

Following close behind are likely to be BB Healthcare Trust PLC (LON:BBH), Liontrust Asset Management (LON:LIO), Civitas Social Housing PLC (LON:CSH), AO World PLC (LON:AO.), JLEN Environmental Assets Group (LON:JLEN), Scottish American Investment Co PLC (LON:SAIN), Oxford BioMedica (LON:OXB) and 888 Holdings PLC (LON:888).

“This FTSE reshuffle is highly reflective of the current crisis environment; out go stocks from sectors that have taken a beating and questions arise as to how and whether some of these can manage this crisis,” said Helal Miah, research analyst at The Share Centre. 

“Carnival, Meggitt and easyJet all head lower as the travel sector has taken a pounding, while Centrica, a long standing member of the index and owner of British Gas, also heads for the mid-cap index – something un-imaginable when retail investors piled into national industries that were being privatised under Margaret Thatcher.

“Replacing them are some businesses that were already doing well before this crisis hit but that have also either benefitted to some degree or have managed to mitigate the crisis well.”

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