SIR BILL GAMMELL, of Cairn Energy, has more reason than most FTSE 100 chief executives to be grateful to Bill Frist, the majority leader of the US Senate.

With the demerger of GUS into its two constituent parts — Experian and Home Retail — slated for next Wednesday, the lowest-valued FTSE 100 constituent as of Friday’s close is due to be edged out of the benchmark index. Unusually for such a split, those two parts are currently big enough — implicitly valued at roughly £5.6 billion and £3.7 billion respectively — to qualify as FTSE 100 members in their own right. For example, the forthcoming split of Severn Trent, up 1p at £13.64 — also due next week — will see the spun-off Biffa take its place in the FTSE 250. As of last week, the GUS shake-up spelt the end of Cairn’s tenure in the blue-chip index, which it rejoined last September.

With a market capitalisation of £2.94 billion, Cairn was in the uncomfortable position of being the 101st company in the FTSE indices after the GUS demerger, just behind Bradford & Bingley, up ¼p to 466p. But Cairn’s saviour appeared at the weekend in the unlikely form of Mr Frist, whose unexpected legislative victory against online gaming has devastated the sector. Specifically, barring a massive reversal, PartyGaming — valued at £ 1.6 billion at last night’s close — will be ejected from the FTSE 100. That demotion is also likely to push 888 Holdings, its mid-cap rival, into the FTSE Small Cap index.

Colin Goldin, index strategist at Credit Suisse, calculates that FTSE 100 tracker funds will need to sell £5.2 million of shares to refect PartyGaming’s demotion. Undermined by a weakening oil price, Cairn retreated 46p to £18.36, with PartyGaming off 4¼p at 40¾p.

The oil price retreat overshadowed the wider market, leaving BG Group down 20p at 631p and BP 14p cheaper at 568½p. The FTSE 100 closed 20.7 points lower at 5,937.1.

Yesterday’s talking points included Corus, 1½p off at 392¼p on persistent talk of a merger with an emerging markets steel producer (with Tate Steel, of India, again cited).

Hammerson, the property group, fell 35p to £12.96 as Citigroup placed 5.5 million shares at £12.97 for an institutional client.

Man Group shed 5¼p to 440p as Citigroup took the hedge fund manager off its “buy” roster. The American broker describes Man’s performance this year as “mediocre”, with only its fund of funds beating the HFRI Macro Index. Yet the group’s shares have been strong, aided by Friday’s upbeat trading statement and expectation that it will float its US brokerage business. Man’s shares have risen 14 per cent since May, despite a 3 per cent fall in the net asset value of its flagship AHL fund over the period. “This has left a 17 per cent discrepancy in relative valuation,” Citigroup says. “History suggests the decoupling will reverse, which could be detrimental to Man’s relative share price performance.”

Vodafone rose 1½p to 122¼p on hosting an investor day in Milan.

• NEW YORK: The Dow Jones industrial average ended at a record closing high of 11,727.30, up 57.00, surpassing the previous record of 11,722.98 set on January 14, 2000. Investors bet that falling oil prices will lift consumer spending and corporate profits.

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