MARKET REPORT: Morrisons set to fall out of the FTSE 100 for the first time in five years as it lags rivals during the pandemic

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Morrisons will drop out of the FTSE 100 for the first time in five years after falling behind rival grocers during the pandemic.

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Its shares closed up 0.4%, or 0.6 pence, to 169.4 pence last night, adding to a multi-day drop that will take it out of the blue-chip index into the mid-cap market in a pending reshuffle.

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While sales have picked up and it has managed to slightly increase its market share — up 10.3% in the 12 weeks to Feb. 21 — many feel it has lagged behind tech-savvy competitors over the past year.

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Last night, Morrisons shares fell 0.4%, or 0.6p, to 169.4p, adding to a multi-day drop that would take it out of the blue-chip index into the mid-cap market.

This means that Morrison faces a second exit period from the blue chip index, most recently in 2016.

Water firm Pennon, which closed down 0.5%, or 4.6p, to 917.6p, is also in the line of fire.

In their place, travel firm Tui, down 3.6%, or 16.1p, to 436.7p, and engineering firm Weir Group, down 2.9%, or 57.5p, are expected to to 1948.5 pence, will rise from the average investment.

But the most notable mover is Dr Martens, who is still enjoying the success of his blockbuster in January, which is predicted to make a move into the FTSE 250.

Many speculated that the group, whose shares fell 1.6%, or 7.7p, to 482.3p, could go straight into the FTSE 100, but Tui is likely to lift it.

Stock Watch – Hotel Chocolate

Traders showed strong interest in Hotel Chocolat, which rose 2.2%, or 8p, to 380p by the close of yesterday’s session.

The retailer managed to create 130 jobs in the six months to December as turnover rose 11% to £102m and profits rose 3% to £16m, helped by a always profitable Christmas season.

Another 600,000 people joined her loyalty program and she launched a chocolate subscription. It plans to open stores in the UK from 12 April.

It was a mixed day for the majors, with the FTSE 100 up 0.4% or 25.22 points at 6613.75 and the FTSE 250 down 0.2% or 43.55 points at 21177.91.

On a busy day of financial results, investors cheered global recruiter Robert Walters’ better-than-expected annual performance.

Profits fell 75 per cent to £12m as companies around the world imposed a moratorium on hiring.

But the rollout of the vaccine and signs that things are improving in Asia, the biggest market, helped the stock climb 6.2%, or 32p, to 552p.

Traders lifted Lookers shares 4.5%, or 1.8 pence, to 42.2 pence after city regulators dropped an investigation into the auto dealer without imposing penalties.

He set aside £10.4 million to pay the fine, but the FCA chastised him instead for “historical culture, systems and controls”.

The investigation was launched in 2019 after red flags were raised within the company regarding the sales process, leading to management’s input and a £19m adjustment to last year’s results.

Travis Perkins, on the other hand, fell 3.3%, or 48.5p, to 1,429.5p after the company posted a £7.7m loss and refused to pay dividends to shareholders.

Sales across the group fell 12 per cent to £6.2 billion last year but rose nearly one-fifth at DIY chain Wickes as extra time spent at home during the pandemic prompted lockdown Brits to spend millions renovating their homes.

Despite this trend, Travis Perkins has renewed plans to split Wickes to focus on sales of building materials. Wickes is expected to be a separate listed company by the summer.

Private aircraft group Signature Aviation said there were still no flights in February due to the second wave and lockdowns, but far fewer than last spring.

It is virtually unchanged, with shares trading up 0.1%, or 0.3p, to 398.9p, despite a £17m loss, as the stock’s price target remained at 411p a share last month.

Private equity giant Blackstone, Edinburgh Airport’s Global Infrastructure Partners and Bill Gates’ investment firm Cascade are awaiting investor approval for a £3.5bn joint bid.

On the aviation front, defense contractor Meggitt received a chilly reception after signing a “massive multi-million dollar” deal to supply Boeing 737 Max jets with cockpit indicators. It closed down 2.5%, or 11 pence, to 429.7 pence.

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