Market report: Travel giants fall off the blue-chip map

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Breaking Travel News:

The changed face of London’s main market was made clear on Wednesday as a FTSE reshuffle saw two travel giants stung by the Covid-19 crisis drop out of the blue-chip index.

Cruise operator Carnival and airline easyJet will both lose their spots in the FTSE 100 later this month, having seen their prices devastated by a severe drop in global travel.

The other fallers are aeroplane parts-maker Meggitt and British Gas owner Centrica – the latter of which has been in the top index, in one form or another, since 1986.

Taking their spots will be cyber security firm Avast, Ladbrokes owner GVC Holdings, B&Q owner Kingfisher – which is regaining its spot in the top index after just a quarter among the mid-caps – and home repairs group Homeserve.

FTSE 100 companies are automatically demoted if their market cap slips to 110th place or lower on London’s main market, while any smaller firm grabbing 90th place or above is automatically promoted.

The Share Centre’s Helal Miah said the moves have been “heavily influenced” by the coronavirus crisis.

There is evidence of the impact of lockdown measures upon the risers as well. Avast has benefited from a widespread shift to working from home, forcing many people to ramp up their security arrangements.

The FTSE 250 exits include food supplier Bakkavor, pub chain Marston’s and travel operator Stagecoach, all of which have seen their trading battered by Covid-19.

The changes, which are based on Tuesday’s closing prices, will take effect on June 22.

European markets continued to soar, with investors ploughing back into equities as governments around the world continued to wind down lockdown measures.

The FTSE 100 leapt 2.6pc, extending a three-month high, while the pan-continental benchmark Stoxx 600 jumped 2.5pc.

Chemring, the defence contractor, was the day’s standout mover, leading FTSE 250 risers with a 56p leap to 270p after it posted a jump in half-year results and stuck to its full-year targets.

The group said its order book remained strong, including new orders from the United States despite the coronavirus crisis.

Its underlying profit before tax rose to £24.2m from £9.9m a year before, while revenues rose to £191m. Stifel’s Annabel Hewson said the results represented a “positive step” for the company.

Oil and gas heavyweights BP and Royal Dutch Shell rose 10.7p to 339.3p and 57p to £13.42 respectively as hopes for recovering demand boosted crude prices. Tui Group, Europe’s largest travel company, bounced nearly 9pc, or 38p, to 485.5p after it struck a deal with Boeing for compensation and slower delivery of 737 Max aircraft.

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