All eyes on M&S & JD Sports ahead of FTSE 100 reshuffle

(Pic credit: Charlotte Ball/PA Wire)
// M&S likely to avoid demotion from the FTSE 100 “by the skin of its teeth” in this week’s reshuffle
// This is largely thanks to an extra £601 million of capital raised through a rights issue
// Meanwhile, JD Sports is expected to make its debut on the FTSE 100

Marks & Spencer is set to narrowly avoid relegation from the UK’s blue chip share index while JD Sports is forecast to make its debut in this week’s FTSE 100 reshuffle.

Stock market experts said M&S is close to being booted out of the top tier for the first time since the FTSE 100 was launched in 1984.

It comes after the retailer’s shares tumbled by nearly a fifth over the past six months amid ongoing pressure on sales and profits.

However, M&S could be saved from demotion thanks to a £601 million investor cash call.

The bellwether retailer is launching the rights issue to help pay for its joint venture with online grocer Ocado, which aims to provide an online food delivery service for the first time.

“M&S now looks like it’s going to avoid relegation from the FTSE 100 by the skin of its teeth, and largely thanks to an extra £601 million of capital raised through a rights issue,” Hargreaves Lansdown senior analyst Laith Khalaf said.

“While the fresh capital won’t actually be available until after the FTSE reshuffle calculation, we expect the index provider to give M&S the nod, on the basis the money’s in the post.”

Meanwhile, the quarterly FTSE 100 reshuffle is expected to see sportswear retailer JD Sports make its debut in the blue chip index.

The sportswear retailer’s shares have surged as it has bucked the wider challenges plaguing the UK retail industry, thanks to rising sales and profits and a string of acquisitions and global expansion.

JD Sports’ fortunes are a stark contrast to the stock market performance of its main rival Sports Direct.

Sports Direct shares have had a difficult year, with the group and its controversial owner Mike Ashley rarely out of the headlines as his empire has sought to expand, snapping up the likes of House of Fraser and Evans Cycles.

The next set of stock promotions and relegations will be announced after the market closes on Wednesday, based on the previous night’s closing prices, and are set to take effect on June 24.

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