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Northern Rock faces FTSE plunge

Date 13 Dec 2007
Author bdaily.info
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Stricken bank Northern Rock is one of seven blue chip firms expected to be relegated from the FTSE 100 Index in its biggest shake-up in over six years. The Newcastle mortgage lender is poised to drop into the FTSE 250 after its recent woes saw it fall to 331st place, narrowly avoiding a fall straight into small cap territory.

Northern Rock's position will be confirmed when the FTSE committee meets to discuss the latest quarterly reshuffle.

Also on the way out of the top flight is newspaper group Daily Mail & General Trust, now ranked 118th, and in 117th place, sugars and ingredients firm Tate & Lyle, which recently reported a 19% drop in profits. They are likely to be joined by Currys owner DSG International, which recently unveiled a 25% fall in first-half profits, Punch Taverns and housebuilder Barratt Developments, which only joined the FTSE 100 in June. The last time the FTSE 100 saw such wide-ranging changes was in September 2001 when eight companies left the index.

Stocks have endured heightened volatility since the summer's credit crunch, which led to Northern Rock's funding crisis and the subsequent run on the bank.

Calculated using Tuesday night's closing prices, changes to the FTSE indices take effect after the close of business on 21 December.

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