The biggest upheaval in the FTSE 100 since the dot-com days of 2001 is expected to be announced today as fears over a consumer slowdown and heightened volatility have led to seven companies being relegated in the quarterly reshuffle of the index.

The demoted seven include Northern Rock, Barratt Developments, the housebuilder — whose market value, hurt by worries about a housing slowdown, has fallen below the £2 billion that it paid for Wilson Bowden in April — and DSG International, the electrical goods retailer formerly known as Dixons.

DSG has been beset by the double blow of worries over consumer spending slowing down and a shift in customer trends, in which more people are buying laptops on a subscription basis from providers such as Carphone Warehouse.

Two pub groups — Mitchells & Butlers and Punch Taverns — will leave the FTSE 100 because their market capitalisations have been hit by falling property values, reducing the likelihood that spinning off property into separate vehicles will add value.

Daily Mail & General Trust, the publisher of the Daily Mail, is also set to drop out because its titles, particularly local papers, have been hit by a migration of advertising to the internet.

Tate & Lyle, the sugar group, is another candidate for relegation. It has issued three effective profit warnings this year, over the supply of sugar in Europe, rising raw material prices and competition hurting sales growth of its Sucralose sweetener.

The seven likely replacements are headed by Cairn Energy, the explorer with oil reserves in India, which has been buoyed by bid talk and the rising price of oil, and FirstGroup, the bus and train operator, which has been boosted by its acquisition of the Laidlaw bus group in the United States.

Thomas Cook will squeeze into the FTSE 100 after issuing a very bullish trading statement yesterday. Based on Monday’s closing prices, Burberry, the fashion retailer, had looked set to jump in, but Thomas Cook’s trading statement, in which the tour operator said that profits for the year would be higher than expected and announced a share buyback programme, helped its shares to jump nearly 7 per cent, up 17½Cook was formed by athrough the merger of Thomas Cook in Germany and Britain’.

The other promotion candidates are Tui Travel, formed this year by a merger of Tui, of Germany, with First Choice, of Britain; Kelda, the water group, which has agreed a takeover by a consortium including HSBC and Prudential; Group 4 Security; and Admiral, the car insurance specialist.

The last time that this many companies were ejected from the blue-chip index was when the dot-com/ telecom bubble was bursting and the stock market wobbled after the terrorist attacks of September 11, 2001. Eight stocks, including “new economy” ones such as Carlton, Misys, COLT, Energis, Spirent, Telewest and Marconi, were ejected. Northern Rock was one of the stocks that replaced them in the FTSE 100.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills