Easyjet and cruise operator Carnival are the two most likely candidates to drop out of the FTSE 100 next week, with share prices tumbling due to a ban on travel under coronavirus lockdown rules, analysts have said.
Both firms have seen their value more than halve in the past three months, despite a small improvement after recent Government announcements on measures to ease the lockdown safely.
Other firms possibly on the way out of the FTSE 100 – an index of the most valuable firms whose shares are publicly traded in London – next Wednesday include British Gas owner Centrica and aerospace parts company Meggitt.
Helal Miah, investment research analyst at the Share Centre, said: “This reshuffle looks set to be one of the biggest in many years, we expect a minimum of four in, four out – but depending on market moves we could see more.”
Mr Miah added that Carnival, which runs Princess Cruises, is the “clearest candidate” to drop out, after the company’s shares tanked by more than 60 per cent since the virus first hit Europe.
Easyjet – which only returned to the FTSE 100 in December – is the next most likely to be relegated, he added.
Investors are wary of buying shares in either, with the future of travel uncertain as coronavirus continues to spread around the world.
ITV and educational business Pearson are also reportedly at risk of dropping out of the index.
Companies that could be set to replace them in the FTSE 100 include cyber security business Avast, repairs firm Homeserve, Ladbrokes owner GVC and medical supplies company Convatec.
Russ Mould, investment director at AJ Bell, said Kingfisher, Foreign & Colonial Investment Trust, B&M European Value Retail and Direct Line are also “jockeying for position and sudden gains in their share prices could yet vault them into the UK’s premier index”.
He added: “If they make the leap, GVC and Convatec would be returning to the FTSE 100 for the first time since March 2019 and December 2017 respectively, while Homeserve and Avast would be making their debuts in the premier index.”
The FTSE 100 is updated every three months.