MARKET REPORT: Famous blue-chips Centrica, Easyjet, Carnival and Meggitt to be booted out of the Footsie following Covid crash
British Gas owner Centrica, Easyjet, Carnival and Meggitt will drop out of the FTSE 100 this month after their shares tanked during the pandemic.
In what will be the biggest shake-up of the blue-chip index since 2016, they are set to be relegated in the latest quarterly reshuffle.
They will be replaced by cyber security firm Avast, Ladbrokes parent GVC, B&Q owner Kingfisher and the emergency repairs firm Homeserve.
British Gas owner Centrica, Easyjet, Carnival and Meggitt will drop out of the FTSE 100 this month in what will be the biggest shake-up of the blue-chip index since 2016
The reshuffle takes place on June 22 but is based on last night’s closing prices. Typically, a stock will be relegated from the index if it is no longer one of the 110 most valuable listed companies on the stock exchange.
At the same time, FTSE 250 firms that rise to 90th or above are automatically promoted.
Budget airline Easyjet was 121st at the close yesterday despite a last-minute rally that saw its shares increase by 2.6 per cent, or 18.6p, to 724.6p.
Defence firm Meggitt ended yesterday ranked 139th, Centrica 143rd and cruise operator Carnival 150th.
Stock Watch – Zotefoams
Shares in materials specialist Zotefoams surged after its biggest client said that it has won a contract to supply the Government.
It rose 16 per cent, or 47p, to 340p following the ‘substantial’ 26-week deal to supply personal protective equipment that uses its plastazote foam.
In a trading update, the company said it had continued operating throughout April and May ‘despite challenging conditions’ created by the lockdown and that it expected a stronger second half.
Helal Miah, investment research analyst at The Share Centre, said: ‘This 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.
‘Replacing them are some businesses that were already doing well before this crisis hit but that have also either benefited to some degree or have managed to mitigate the crisis well.’
The FTSE 100 had a chipper day, despite all the changes afoot, rising by 0.87 per cent, or 53.72 points, to 6220.14. The FTSE 250 index of mid-sized companies was up 0.92 per cent, or 158.78 points, to 17,436.31.
Shares in Galliford Try climbed by 4.3 per cent, or 5.32p, to 128.86p after the construction firm won a new contract.
It has been hired by Strathclyde University to design and build the proposed National Manufacturing Institute Scotland, in a deal that is worth £42million.
The research facility will be close to Glasgow Airport and focus on manufacturing methods. Work is expected to begin in the summer.
Biotech firm Novacyt said sales of its coronavirus testing kits had now reached £120million.
But the company’s shares sunk 8.7 per cent, or 29p, to 306p after it admitted that its test had not been approved for state reimbursement by French authorities.Novacyt stock has risen by more than 2000 per cent this year.
‘As new regions are impacted by the pandemic, we expect the demand for our Covid-19 test to continue to grow,’ boss Graham Mullis added.
Private hospitals operator Mediclinic International rose 8.4 per cent, or 23p, to 297.4p despite its annual losses growing.
The group, which said its Swiss subsidiary had been providing bed space for health authorities during the pandemic, reported a loss of £315million for the year to March 31, up from £151million the previous year. Revenues rose from £2.93billion to £3.08billion.
And although the virus crisis hit patient numbers and forced it to cancel elective procedures, it said patients were now starting to return as authorities gradually lifted lockdown measures.
However boss Ronnie van der Merwe warned: ‘A high degree of uncertainty remains regarding the progression of the pandemic and its full impact, which may well continue for at least the next 12 months.’
Mediclinic, which runs 77 hospitals in Switzerland, South Africa and the Middle East, has halted all non-essential spending and suspended its dividend to preserve cash.