Royal Mail and Provident crash out of FTSE 100 in latest reshuffle

ROYAL Mail crashed out of the FTSE 100 in the latest quarterly reshuffle last night, receiving the axe after drifting 16pc this year as falling marketing mail and persistent pension problems began to bite.

As expected, troubled doorstep lender Provident

Financial is the other blue-chip casualty after its shares nosedived 66pc last week following its second profit warning of the summer, leaving its market capitalisation well short of the requirements.

As of Sept 18, Uae-based healthcare provider NMC Health and housebuilder

Berkeley Group will take up their places on the blue-chip index.

Unlike Provident’s explosive exit out of the blue-chip index, Royal Mail’s valuation has steadily faded since the EU vote, the parcel deliverer narrowly escaping demotion in the previous reshuffle.

The unresolved pensions dispute still hanging over the company and falling marketing mail revenues have driven Royal Mail’s steady slide downwards, according to Alex Paterson, an Investec analyst.

Of the FTSE 250 exits, construction giant

Carillion’s fall from grace is the highest profile, its 70pc plunge in a matter of days in July following its own shock profit warning making it a certainty for the chop. The company “fell foul of the outsourcers’ kryptonite, bidding too aggressively for contracts that ultimately proved loss-making”, explained Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

Away from the reshuffle, the FTSE 100 rebounded into positive territory as investors quickly brushed off the new escalation on the Korean Peninsula.

European equity markets were the main winners from the prompt return to risk-on mode with the FTSE 100 climbing 27.83 points to 7,365.26. Stocks in Paris and Frankfurt enjoyed stronger gains after weakening most on Tuesday due to the euro’s strength, with the DAX and

CAC 40 both up 0.5pc. Crude prices continued to slip as the flooding caused by Hurricane Harvey took US refineries out of action, pulling down demand and Brent crude to below $51.50 per barrel. Riding the markets’ wave of optimism

BP and Royal Dutch Shell B shook off the drop to rise 1.5p to 441.9p and 5p to £21.59, respectively.

Expectations that the aftermath of the storm could drive new business for equipment rental firm

Ashtead lifted it 77p higher to £16.72, making it the top blue-chip riser in London.

Broadcaster ITV reversed some of Tuesday’s losses based on mounting fears over the health of the advertising market to climb 3.9p to 156.9p, while J

Sainsbury jumped 5.1p to 235.8p after Co-op revealed it is in talks to acquire Nisa, the “big four” supermarket’s former takeover target.