Easyjet has lost nearly 45 percent of its market value this year, with cruise operator Carnival also being down more than 67 percent. They have seen a huge fall in demand for travel during the coronavirus pandemic. FTSE Russell, the global index provider, has said both companies would be relegated to the FTSE 250. They will join British Gas owner Centrica and engineering company Meggitt.
FTSE 100 LIVE: Easyjet fell from the FTSE 100
But Russ Mould, investment director at AJ Bell, added the airline could make a comeback later in the year.
He told Sky News: “EasyJet would need a big rally, but it could come back in September (when the next reshuffle is due).
“With airlines, anything is possible.”
Meanwhile the European Central Bank will today discuss proposals to expand its Pandemic Emergency Purchase Programme (PEPP) to try and mitigate the continent-wide impact of the coronavirus pandemic.
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Shares in Apple have been tipped to hit $2billion
8.34am update: Companies face FTSE “relegation” after poor showings
Easyjet has lost nearly 45 percent of its market value this year, with cruise operator Carnival also being down more than 67 percent.
They have seen a huge fall in demand for travel during the coronavirus pandemic.
FTSE Russell, the global index provider, has said both companies would be relegated to the FTSE 250. They will join British Gas owner Centrica and engineering company Meggitt.
8.25am update: FTSE dips after three-month high
London’s FTSE 100 dipped from three-month highs on Thursday following strong gains earlier in the week on bets of a rebound in post-coronavirus economic activity, while energy firms tracked a fall in oil prices.
The blue-chip index was down 0.4 percent and on track to post its first decline this week. BP Plc and Royal Dutch Shell Plc shed 0.4 percent and 1.1 percent, respectively, and were among the biggest drags on the FTSE 100.
The mid-cap FTSE 250 fell 0.6 percent, also set to snap a three day winning streak, with real estate stocks, life insurers and banks among the biggest percentage losers.
Car dealership firm Lookers tumbled 5.2 percent after setting out plans to close 12 sites and lay off 1,500 employees amid the coronavirus crisis, and saying a probe into its operations highlighted the need to improve “some behavioural and cultural aspects”.
Luxury carmaker Aston Martin shed 5.4 percent on announcing plans to shed up to 500 jobs as it seeks to bring its cost base into line with reduced sports car production levels.
8.15am Trading underway
The FTSE-100 index opened at 6382.41.
8.04am update: Apple shares on course to hit $2trillion
Shares in tech giant Apple have been tipped to pass an eye-watering $2trillion within four years, coronavirus pandemic notwithstanding.
Evercore ISI analyst Amit Daryanani thinks the stock could hit a $2 trillion market cap within four years, which would spell a increase of share values of between 13 and 17 percent annually.
In a note, he said: “Apple continues to offer the best risk/reward in large-cap tech and long-term investors should use any weakness to add to positions.”
7.51am update: ‘Traders should be cautious’
Mr Mahony added: “China provides a leading gauge of where the likes of Europe and the US could be if a similar path is taken.
“However, traders should be cautious given that this rise back into expansion does simply highlight month-on-month improvements rather than making any relative comparison to pre-crisis levels.
“Nevertheless, with the Chinese services sector growing sharply in May, there is a hope that we will see something similar in the UK once businesses can reopen.”
Police wearing masks outside the ECB in Frankfurt in March
7.48am update: Markets hampered by second wave fears, warns analyst
Fears over a second wave of COVID-19 are continuing to hamper markets worldwide, an analyst at IG has warned.
Speaking yesterday, Senior Market Analyst Joshua Mahony said: “The big risk for markets comes in the form of a second wave, and the recent deterioration in social distancing certainly does pose a risk that we will see restrictive measures reimposed to the detriment of value stocks.
“Overnight data from China has helped bolster confidence of an economic rebound in the region, after the Privately compiled Caixin services PMI reading jumped into strong expansion.”
7.37am update: ECB “still on the hook”
Mr Kupelian added: “The reality of the situation is that the ECB still remains on the hook to secure recovery in the monetary block.
“The European Commission’s latest proposal of the ‘Next Generation EU’ recovery instrument is significant both in terms of size and content as it includes a combination of grants and loans.
“But it still needs to be negotiated amongst the EU member states and will come to force in 2021.”
The FTSE 100 finished on 6,382.41 points yesterday, up 2.61 percent
7.26am update: ECB “will push ahead with COVID-19 plan despite court ruling”
Speaking ahead of today’s crunch meeting, an economist has predicted the European Central Bank will push ahead with its controversial plan aimed at propping up economies badly hit by the coronavirus pandemic.
Barret Kupelian, PwC Senior Economist, said: “On Thursday we expect the European Central Bank (ECB) to remain undeterred by the recent ruling of the German constitutional court and expand its Pandemic Emergency Purchase Programme (PEPP) as already signalled by some members of its Governing Council.
“To justify this move, the ECB is likely to cite its revised economic projections which will also be presented on Thursday.
“These will incorporate the latest Q1 data on economic activity and show that the monetary union is likely to shrink between seven percent to 16 percent this year.
“More importantly, the Governing Council is expected to highlight the below target level of Eurozone inflation, some of which is being driven by the low level of oil prices globally.”
7.20am update: Euro holds on to gains prior to ECB meeting
The euro held onto gains before a European Central Bank meeting later on Thursday, where policymakers are expected to increase debt purchases to support the bloc’s weakest economies.
Oil prices fell, reversing gains made the previous session, due to uncertainty about supply cuts by major producers.
Markets for risk assets have been on a tear in recent days, carrying some stock market indexes to within sight of levels before the coronavirus outbreak.
The Nasdaq Composite,, the S&P 500, and the Dow Jones Industrial Average are close to overtaking all-time closing highs registered in February.
ANZ Research senior economist Liz Kendall and strategist David Croy, said in a note early on Thursday: “Liquidity provision by central banks – and expectations that more is coming – is helping to support the recent drive in risk markets.”
7.14am update: Asian shares rise on coronavirus recovery hopes
Asian shares rose to a two-month high on Thursday as expectations of further government stimulus boosted the confidence of investors in an economic recovery from the global coronavirus pandemic.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.43 percent, earlier touching the highest since March 9.
Shares in Australia rose 0.93 percent after the country’s prime minister unveiled a fourth stimulus package to repair the economy, this time aimed at the battered construction sector.
Chinese shares were little changed due to lingering worries about diplomatic tension between the United States and China, while US stock futures fell 0.15 percent.
Euro Stoxx 50 futures were down 0.03 percent, German DAX futures were up 0.17 percent, while FTSE futures were down 0.1%, suggesting a cautious start for European equities.
6.02am update: HSBC, StanChart shares rise in Hong Kong after backing China security law
Hong Kong-listed shares of HSBC and Standard Chartered rose on Thursday after the banks backed China’s imposition of a national security law on the city, even as a pro-democracy and newly formed financial workers’ union criticised the move.
Some staff at the Asia-focused British banks and analysts said HSBC and Standard Chartered’s stance on the law would help them protect their businesses in their single most important market of Hong Kong.
HSBC shares were up 1.6 percent at noon, after having risen as much as 2.8 percent earlier, and StanChart jumped 2.3 percent. The broader Hang Seng market index was down 0.1 percent.
In a break from their usual policy of political neutrality, both banks on Wednesday backed the national security law that has drawn global condemnation and revived anti-government demonstrations in the former British colony.
“Investors should welcome these statements,” said Hao Hong, Hong Kong-based head of research at brokerage BOCOM International. “It could get shitty if you are in the city and don’t support the law.”