BA set for top-flight FTSE return

BA has shown signs of recovery

British Airways is set to return to the UK's prestigious FTSE 100 share index, just three months after being demoted.

During the last reshuffle of the FTSE 100, BA's falling share price led it to be relegated to the FTSE 250 index for the first time since it was privatised in 1987.

But a recent recovery in its share price has pushed it back into the list of the UK's biggest companies.

Telecoms group Cable & Wireless appears destined for demotion after worries about its financial position led to its share price being halved over the past two days.

Investors have shunned the shares since C&W announced late last week that the firm had a potential £1.5bn tax liability after receiving a "junk bond" ranking from credit rating agency Moody's.

Up and down

Also on the way out appears to be the steel maker Corus.

Its share price fell sharply last month following the collapse of its planned merger with the Brazilian firm Companhia Siderurgica Nacional.

C&W and Corus are expected to be joined in the FTSE 250 by Brambles Industries, the Anglo-Australian engineering group.

Brambles shares have been hit by a number of profit warnings, following problems with the company's European pallet division.

As well as BA, Liberty International - the group which runs the Lakeside Thurrock and Gateshead Metro Centre retail parks - and leisure group Whitbread are expected to be promoted to the FTSE 100.

Quarterly reshuffle

The make-up of the FTSE 100 share index is reviewed every three months.

A company's stock is promoted into the FTSE 100 if the firm's market capitalisation ranks in the top 90 at the close of business on the last day of trading before the review - in this case Tuesday.

If a stock is ranked 111th or lower, the company is ejected from the index and it drops into the FTSE 250.

While the changes are based on Tuesday's closing prices, they need to be approved at a meeting on Wednesday and will then take effect on 23 December.