Friday 29 May 2020 4:34 pm

Cruise firm Carnival set for the drop in FTSE 100 reshuffle

Cruise operator Carnival is set to drop out of the FTSE 100 stock index next week when Britain’s league of the biggest companies is reshuffled, having been battered by the coronavirus crisis.

Analysts tip airline Easyjet to also drop out in the FTSE reshuffle. British Gas-owner Centrica is also likely to be replaced as one of the UK’s 100 biggest firms by market capitalisation.

Read more: FTSE reshuffle: Kingfisher, NMC Health and Tui booted out of top City index

Software security firm Avast and Ladbrokes owner GVC are tipped to enter the FTSE 100 after faring relatively well during the Covid crisis.

UK stocks have had one of their most turbulent periods in history since the last FTSE reshuffle three months ago. 

The FTSE 100 index plunged around 25 per cent in late February and early March as it became clear to investors that coronavirus posed a near-catastrophic economic threat.

Despite the stock market rallying strongly since late March, many stocks have struggled to recover. Among the worst-affected companies have been travel and energy firms, with the lockdown causing a drastic slump in demand.

Helal Miah, investment research analyst at online trading platform The Share Centre said Carnival, Easyjet, Centrica and aerospace engineering group Meggit are almost certain to go down in the FTSE 100 reshuffle. It will take place on 3 June using the market capitalisations of 28 May.

FTSE Russell, a company owned by the London Stock Exchange, reassesses the FTSE 100 every quarter to ensure it includes the biggest firms by market cap.

In early March, retail group Kingfisher, NMC Health and shopping centre-owner Tui were all kicked out of the index.

Travel restrictions hurt FTSE 100 firms

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown: “The world has changed since the last FTSE review.” 

“The UK stock market was some 13.5 per cent higher back then and Shell topped the list of the UK’s largest companies rather than Astrazeneca.”

“It looks like easyJet and cruise operator Carnival are among the companies set to drop out of the FTSE 100 this time round. Travel restrictions around the world mean revenues have sunk to practically zero.”

Read more: FTSE 100 drops sharply as US-China tensions rise over Hong Kong

Miah said ITV and publisher Pearson could also drop out of the FTSE 100 along with Carnival, Easyjet and Centrica.

He said Avast, GVC, and home energy firm Homeserve are the most likely to be promoted. The Share Centre also said Kingfisher, medical products firm Convatec and airline Wizzair could join the FTSE 100.