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EasyJet back in FTSE 100 six months after dropping out

Joanna Partridge
Photograph: Stéphane Mahé/Reuters

EasyJet has landed back in the FTSE 100, following a quarterly reshuffle of the leading City share index. The budget airline has regained its membership of the club six months after its relegation.

The carrier had been expected to return to the benchmark index despite a turbulent year in which it struggled with rising fuel prices and economic uncertainty around Brexit.

But the airline’s share price was boosted in recent months by rising passenger numbers, the addition of more aircraft and tougher action on costs. EasyJet’s closing price on Tuesday was £13.07, up 18% on the year, which was enough to confirm its return to the UK’s biggest stockmarket index. The carrier has also benefited from problems at its competitors, from the collapse of Thomas Cook Airlines to strikes at Ryanair and British Airways.

EasyJet has been promoted at the expense of insurer Hiscox, which was demoted to the FTSE 250 after its share price fell by 17% this year. The Bermuda-based specialist insurer has been hit by an increase in claims for damage from large storms and typhoons in the US, the Caribbean and Japan. Its share price slid after the release of a trading update last month, when the firm announced it was setting aside extra money to cover claims from extreme weather events.

The FTSE 100 was launched in 1984 and contains the UK’s largest listed companies by market value. Membership is considered a mark of prestige, and can also increase demand for a company’s shares, as investment funds which track the index add the stock to their portfolios.

The London Stock Exchange carries out a rebalance of the index each quarter, according to share price movements, meaning only a handful of firms are able to move up or down.

There are rules in place to prevent high levels of turnover. Any company outside the FTSE 100 with a market capitalisation equal to or better than 90th position in the main market is guaranteed promotion. Conversely, there is automatic demotion to the FTSE 250 for any company that is valued lower than 111th position.

Once a place in the club is secured, history shows it is not always easy to hang on to. EasyJet first entered the FTSE 100 in 2013 and fell out again in June this year. Meanwhile, Hiscox only joined the top tier for the first time last December.

The changes will be confirmed on 4 December and take effect on 23 December.