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Tuesday, 11 September, 2001, 11:21 GMT 12:21 UK
Hi-techs face FTSE relegation
Humbled business giants, including Marconi, Spirent and Carlton, are poised to discover whether they will be relegated from the UK's corporate premier league.

Likely rejects:
Colt Telecom
United Business Media
The companies' share prices at the close of trade on Tuesday will be used to decide whether they will keep their place in the elite FTSE 100 index of leading listed UK firms.

With many firms, particularly those in technology sectors, seeing their share prices spiral even further in recent weeks, the latest quarterly FTSE reshuffle promises to be one of the largest in the index's history.

Likely new entrants:
Enterprise Oil
British Land
Severn Trent
Other companies positioned in the FTSE 100 relegation zone include software firm Misys and cable TV giant Telewest.

Jockeying for promotion from the mid-ranking FTSE 250 index are companies including Enterprise Oil, British Land, and recently-listed Friends Provident.

'Positive impact'

While the move is set further to highlight the declining fortunes of technology firms, with some old economy stalwarts returning to favour, the index pruning may have more deep-seated affects, City analysts said.

"Whilst this may appear no more than a routine reshuffle, September's review is likely to impact the market in a positive way," Merrill Lynch analyst Khuram Chaudhry said in a research note.

"If sector performance continues to favour the old economy sectors versus new economy then the FTSE 100 is technically better supported."

The reshuffle will take effect on 24 September.

Turbulent stocks

The FTSE reshuffle will come during a week of tension ahead of a key interest rate decision by the European Central Bank.

The rate decision on Thursday is expected to take into account statistics on several eurozone countries' gross domestic product (GDP) during the months April, May and June of this year.

The GDP statistics are expected to reveal that some of Europe's largest economies, including Germany, are close to suffering recessions.

City latest

In midday trading, Marconi and Misys shares had staged a moderate bounce, adding 4.5p to 38p, and 12p to 298p, respectively.

Carlton had lost a further 10.25p to stand at 247p, with Spirent 1.5p lower at 114p.

Enterprise Oil was 3.5p higher at 560.5p, with Wolseley 8p up at 490p, and British Land 3p firmer at 375p.

The BBC's Marcia Hughes
"At least half a dozen companies will be relegated"
See also:

11 Sep 01 | Business
Old economy bounces back into FTSE
11 Sep 01 | Business
Shares rally after worldwide slide
10 Sep 01 | Business
FTSE hits three-year lows
07 Sep 01 | Business
Stock markets plunge on US data
07 Sep 01 | Business
BA risks FTSE rejection
24 Aug 01 | Business
Matalan poised for FTSE promotion
14 Aug 01 | Business
Marconi could fall from FTSE index
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