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Easyjet set to return to FTSE 100

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Easyjet is set to return to the FTSE 100 in the final reshuffle of the London index this year.

The budget airline was relegated from the UK’s blue-chip index six months ago after a tough start to 2019 due to Brexit uncertainty, volatile oil prices and weak sterling.

Easyjet’s share price was up 18 per cent on the year at close on Tuesday.

It is set to replace reinsurer Hiscox, which has been hit with an increase in claims for damage from natural disasters as well as a rise in litigation claims in the US.

FTSE Russell, the index provider, will confirm the moves after the end of trading on Wednesday.

Helal Miah, investment research analyst at The Share Centre, said: “Reinsurance specialist Hiscox currently occupies the lowest ranking in the FTSE 100, at 112th place, meaning it is almost guaranteed to fall out after the market closes today.

“It has become a victim of a number of natural disasters, such as Hurricane Dorian and typhoon Faxi and Hagibis, as well as the culture in the United States where juries are becoming more generous in how much they award in litigation claims.

“Insurers like Hiscox have to set aside more funds because of this ‘Social Inflation’ phenomenon. The share price has reached levels not seen since 2017 despite written premiums rising by 7% in the latest trading period which is expected to reach a new record for the full year.”

He said that Easyjet shares have “staged a modest recovery” since September – “about the time when Thomas Cook collapsed and went into liquidation”.

“The latest set of full year results were also fairly good as profits did not slump as much as feared and passenger numbers hit new records,” he added.

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