PolyNovo Shares Slide Following Index Removal

Highlights:

• Polynovo Limited (ASX: PNV) posted strong FY25 results, with revenue rising to AU$129.19 million and net income more than doubling to AU$13.21 million.
• Despite the earnings lift, shares fell 4.6% at the time of writing, as investors questioned the sustainability of recent momentum.
• Global expansion remains a key driver, supported by new product registrations and growing demand for advanced wound care across multiple international markets.

Forced Selling Pressure from Index Exit

PolyNovo Limited (ASX: PNV) is trading among the ASX’s top five losers today, with the stock down around 4.1% at the time of writing. The decline follows confirmation that the company will be removed from the ASX 200 index, a move that often sparks automatic selling from index-tracking funds and ETFs. This technical adjustment appears to be weighing heavily on today’s share price.

Strong Results, But Market Caution Prevails

The sell-off comes despite PolyNovo reporting solid full-year results, including robust revenue growth and improved profitability. However, the latest downturn highlights that short-term market sentiment is being driven more by structural index changes than company performance. Investors remain cautious about the company’s recent earnings.

Broader Market Adjustments at Play

PolyNovo’s removal forms part of a broader reshuffle of the ASX 200, which sees several companies added and others dropped. These rebalancing events often drive higher trading activity and sharper price swings as fund managers reposition portfolios to match the updated index makeup. While these effects are usually temporary, they can lead to sharp short-term price movements, as seen in PolyNovo today.

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