UK tech stocks to be demoted

London traders will soon be looking at new stocks on the FTSE indices

LONDON, England -- Former high fliers of the UK's technology sector are about to take a big fall.

Microchip designer ARM Holdings (ARM), software maker Logica (LOG) and electronic parts provider Electrocomponents (ECM) -- once the darlings of investors -- are likely to be bounced from London's blue chip FTSE 100 index on Wednesday.

They are expected to be replaced by three so-called old-economy companies -- Xstrata (XTA), a Swiss-based South African coal mining group, Johnson Matthey (JMAT), a mining and chemicals operator, and Bunzi (BNZL), which makes everything from cigarette filters to paper coffee cups.

The regular quarterly reshuffling of FTSE indices will be based on companies' market capitalisation at the close of trading on Wednesday. Changes will take effect on June 24.

The biggest changes will be seen in the technology sector, where shares prices have plummetted as investor enthusiasm soured as the economy faltered and companies failed to deliver profits.

Adding insult to injury, electronics group Marconi -- once a member of the FTSE 100 -- is also being dropped from the FTSE 250, an index of companies with medium capitalisation, and will join the lowly ranks of small cap firms listed on the LSE.

Marconi (MONI) has seen its market capitalisation fall from a high of £30 billion to a low of £190 million as its debt mounted and investors fled its stock.

Also falling to the FTSE small cap index is cable operator Telewest Communications (TWT), which is also laden with debt, mobile computer company Psion (PON), mobile phone component maker Filtronic (FTC) and healthcare products firm Medisys (MDY).