Capita and Dixons Carphone demoted from Britain's FTSE 100

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By Helen Reid

LONDON, March 2 (Reuters) - Outsourcing company Capita (Taiwan OTC: T1614Y.TWO - news) and phone retailer Dixons Carphone (Frankfurt: CWB.F - news) will leave Britain's blue-chip FTSE 100 share index following index provider FTSE Russell's quarterly review.

Mid-cap investment trust Scottish Mortgage and pest control company Rentokil Initial (Other OTC: RKLIF - news) would be promoted to the index of Britain's biggest companies, FTSE Russell said in a statement late on Wednesday.

The changes to constituents will be applied after market close on March 17 and come into force the following trading day, March 20.

Following steep declines in their share prices, Capita (LSE: CPI.L - news) and Dixons Carphone are currently the smallest, by market value, on the index. They will join the FTSE mid-cap index.

Capita first entered the FTSE 100 in 2000, but was in the mid-cap index from 2003 to 2004.

For the British blue-chip index, companies which fall to 111th or lower in a ranking by market values on the review date could be deleted to be replaced by the largest non-constituents.

The increasing popularity of exchange-traded funds (ETFs (Shenzhen: 395013.SZ - news) ) has lent greater importance to the constitution of major benchmark indexes and led to index rebalancing days becoming among the busiest across major markets as ETFs tweak holdings to match the index they track. (Reporting by Helen Reid, Editing by Atul Prakash)