* EasyJet to follow Tui travel into Britain's top index
* Wood Group to drop out as energy services sector struggles
* LSE could replace Serco if it can hang on to 90th spot
* Thomas Cook surges 130 percent into probable mid-cap berth
By Alistair Smout
LONDON, March 4 Airline easyJet is set to join
the UK's leading share index for the first time and small cap
tour operator Thomas Cook the mid-cap index as the tourism
sector rebounds from tough trading conditions.
easyJet would follow in the footsteps of sector peer
Tui Travel, promoted to the FTSE 100 in December,
and replace energy services firm John Wood Group.
The airline has risen 37.6 percent since the FTSE's last
rejig, in December, buoyed by rising passenger traffic and a
strategy to boost revenue by offering extra services, with good
demand for flights from London.
The imminent promotion reflects demand from leisure and
business passengers in the UK to travel abroad, which had been
muted after the economic downturn, analysts said.
The surge in easyJet's shares has made it the 82nd biggest
company in the UK by market capitalisation, overtaking Tui
Travel, which was added at the last reshuffle.
Promotion to the FTSE 100 would further increase demand for
2.5 million easyJet shares from those funds who passively track
the performance of the index, Citi analysts said.
Also set to join the FTSE 100, the London Stock Exchange
has risen 37 percent as trading volumes climbed and
ranks 90th by market cap, qualifying it for automatic promotion.
If successful, the former blue chip -- evicted from the top
list in June 2010 as trading volumes declined -- would probably
see demand for 1.8 million extra shares from index trackers,
John Wood Group -- set to leave the FTSE 100 after
dropping to 112th place by market capitalisation -- reflects
weakness in the energy services sector.
Any blue chip that closes at 111th place or below on Tuesday
evening automatically drops out of the FTSE 100, and if Wood
Group is demoted, index trackers could look to sell 3.6 million
shares of the group's shares, Citi said.
Only re-admitted into the top tier in September, Wood Group
has underperformed in line with the rest of the sector and is
down 1.8 percent since the last reshuffle.
The stock was hit by a poor 2013 outlook, echoing falls for
peers Saipem and Petrofac.
Mid-cap outperformance has also brought outsourcing firm
Serco to the cusp of a FTSE 100 exit. It is 110th in the
market cap list despite rising 6.4 percent since the last rejig.
While not in line for automatic relegation, it would be
demoted to make way for the LSE as things stand.
A Serco demotion would likely see the 2.5 million shares
demanded by trackers of the FTSE 250 heavily outweighed by the
7.5 million looking to be sold by FTSE 100 trackers, Citi said.
Serco, which makes around a fifth of its sales in the United
States, has been hit by concern about potential outsourcing cuts
there as well as slow growth in the UK.
Serco and John Wood Group both report results on Tuesday, so
may be saved if their shares get a big enough lift.
Mirroring the success of easyJet in gaining index promotion,
Thomas Cook is in line to join the FTSE 250 after it
surged 130 percent since the last shake-up.
The firm cut its quarterly operating loss last month. It
said its turnaround plan was on track and that it had seen
stronger operating performances in its major markets including
Also in line for an upgrade are online betting firm 888
Holdings and NMC Health, while Stobart Group
, JD Sports and Raven Russia could lose