Royal Mail, ITV could make it to FTSE 100 this quarter while Renishaw may be relegated

It looks like Royal Mail (RMG.L) and ITV (ITV.L) could make their way into the coveted FTSE 100 (^FTSE) this quarter, while engineering firm Renishaw (RSW.L) may be relegated to the FTSE 250 (^FTMC).

The FTSE 100 represents the 100 largest companies listed on the London Stock Exchange (LSEG.L) by market capitalisation, while the FTSE 250, where Royal Mail is right now, includes the following biggest 250 firms.

The reshuffle, which happens every quarter, will take effect on Wednesday and will be based on Tuesday’s closing prices.

The following companies may be added to the FTSE 250, as per the index’s indicative review changes guidance published last week:

• Renishaw, which ticked up 1.6% Tuesday afternoon.

• Auction Technology Group (ATG.L), which was down roughly 1.2% at the time of writing. It powers online marketplaces for buying art and antiques as well as industrial and commercial equipment.

• E-card retailer Moonpig Group (MOON.L), up about 3%.

• Consumer reviews operator Trustpilot Group (TRST.L), which was 0.9% lower.

• Door and window manufacturer Tyman (TYMN.L) was up 3.6%.

• Volution Group (FAN.L) rose 2.5%. It supplies ventilation products.

Meanwhile, the following could be taken out:

• Foresight Solar Fund (FSFL.L), up 0.6%.

• JLEN Environmental Assets Group (JLEN.L), which rose 0.7%.

• Provident Financial (PFG.L) gained 4.3%.

• Sabre Insurance Group (SBRE.L) ticked up 1.2%.

• Building merchant Wickes Group (WIX.L), which posted strong sales on Tuesday, surged 6.8%.

Royal Mail ticked up 2.5% on Wednesday afternoon. Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said “Royal Mail’s new chapter in the FTSE 100 begins with a fresh upwards march of its share price."

"It was a slam dunk new entry, after opening a bulging sack of profits and headed into the top flight at the end of last week, ahead of the main re-shuffle later today," she said, adding: "It regained the coveted position early with the deletion of RSA Insurance Group (RSA.L), following its takeover" as per a deal with deal with Canadian insurer Intact and Danish insurer Tryg.

Streeter expects ITV to join FTSE 100 as well: "ITV is now looking like a highly likely contender to regain its prime-time slot following a recovery in advertising spending."

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She said the broadcaster’s revenue plunged after Love Island was cancelled and episodes of the programme were scaled back during the pandemic but its marketing spend is ramping up again.

As for Renishaw, she said it has seen a lift in its share price on Tuesday, but it is "highly unlikely" to be enough to stop its slide back into the FTSE 250.

“It was boosted into blue chip status by announcing its sale with impeccable timing for the last reshuffle. But the sale board is still up and the high price tag and strings attached to the deal seemed to have put off potential suitors,” she said.

And she expects DarkTrace (DARK.L), which saw shares rise 2.3% on Tuesday afternoon, to join the FTSE 250. The company uses machine learning to scan regular business operations and detect tiny irregularities.

“Investors are clearly hoping the global shift to digital should open up new opportunities and markets for DarkTrace as firms scale up their operations to meet demand, whilst trying to ensure their systems stay secure,” said Streeter.

Auction Technology Group shares were down but Streeter believes it is “still highly likely to enter the FTSE 250 fray.”

“The Antiques Trade Gazette owner is an expert in online auctions and figures in its first results after listing in February indicated that there was still high demand for remote bidding despite the easing of pandemic restrictions.”

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E-card retailer Moonpig’s shares were up 2.5%.

“By positioning itself as a digital sales platform, using data to predict consumer preferences, Moonpig has succeeded in positioning itself as a big e-commerce player, rather than an online card retailer,” said Streeter.

Accoridng to dailyfx, the FTSE 100 is focused on blue-chip or large cap stocks in select sectors, such as Shell (RDSB.L) and BP (BP.L) in oil, GlaxoSmithKline (GSK.L) in pharmaceuticals, Rio Tinto (RIO.L) in mining, and HSBC (HSBA.L) in banking.

Meanwhile, the FTSE 250 has a broader range of industries and a more proportional representation for sectors like consumer services and industrials.

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