Abrdn has returned to the FTSE 100, while Harbour Energy has relegated from it.
The FTSE Russell Group’s quarterly review means the oil and gas group will drop to the FTSE 250 after mounting pressure on the UK Government to impose windfall taxes on profit-turning energy firms.
It has been referred to as a “yo-yo stock” by analysts because it has already been demoted and promoted this year, and will once again be demoted to the lower ranks.
Vet specialists Dechra Pharmaceuticals and private equity firm Intermediate Capital Group have also been knocked off the FTSE 100 after seeing their shares sag in recent months.
The ranking of companies in the London Stock Exchange is reviewed every three months, with the latest changes based on market capitalisations on 29 November.
The changes will come into effect for this quarter on 19 December.
Glasgow-based engineering firm Weir Group has also seen its fortunes change with a promotion to the FTSE 100, after moving further into the mining sector during the pandemic and seeing its order numbers boosted.
Specialist insurer Beazley is another company to have enjoyed a promotion following the reshuffle.
Beazley, which provides insurance from commercial spaceflight to aviation war cover, has pursued a more cyber-focused business and is involved in the first rocket launch on UK soil at SpacePort Cornwall.
Abrdn was relegated from the top index after the last quarterly review, but its shares have jumped by 40% over the past three months, giving it a push back up with the biggest London-listed firms.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Volatile markets and concerns about the prospects for global growth are the headwinds driving changes in the FTSE 100.
“Harbour Energy has been sideswiped by the rumours and then confirmation of an increase in a windfall tax on North Sea oil and gas producers.
“Pleas from Linda Cook, chief executive of the company, for Chancellor Jeremy Hunt to look again at taxing profits went unanswered.
“Opportunities in the cyber world and the burgeoning space race look ripe for the picking for specialist insurer Beazeley which is set to enter the FTSE 100.”
Elsewhere, the FTSE Russell confirmed that Digital 9 Infrastructure and European Smaller Companies Trust were promoted to the FTSE 250 after recent strong performances.
They will replace Home REIT and Petrofac which have been relegated from the index.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “The amount of change to the FTSE 100 this year underlines how far the tide has gone out and how unloved many UK companies are – the level of M&A activity over the past 12 months is further proof of that.
“The re-introduction of Foreign & Colonial, the world’s oldest investment trust, earlier this year was another marker of where the UK is in the economic cycle. It has only been part of the top index on three other occasions, from December 1995 to June 1996, from March 2003 to March 2004, and March to September 2009.
“Weir is a great example of a company that has taken self-help measures to lift itself out of a potentially tricky position,“ he continued. “It refocussed its business on mining and aggregates, moving away from its previous main market of oil and gas, and at the same time, the company has truly engaged with its environmental impact and taken steps to improve its position on that front.”
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