Building, oil and mobiles make it to FTSE 100

A construction group, oil company and mobile phone seller are set to rub shoulders with the élite companies on the London Stock Exchange after being accepted onto the prestigious FTSE 100.

Taylor Wimpey, Tullow Oil and Carphone Warehouse will move to the index of the largest UK listed companies by market capitalisation following a quarterly review, the FTSE said yesterday. The London Stock Exchange itself, which has soared in recent months on bid speculation, could only make the reserve list.

Khuram Chaudhry, European equity strategist at Merrill Lynch, said: "There is a certain prestige element to being in the FTSE 100. The move is a reflection of the most dynamic stocks in recent weeks."

None of the changes will come as much of a surprise to market observers. Taylor Wimpey was created from the merger of Taylor Woodrow and George Wimpey in March, with the combined market capitalisation of about £5bn. Tullow Oil has long been a market darling, closing at 560p yesterday, up from 104p five years ago, and Carphone Warehouse has been a growth stock, benefitting from a string of positive newsflow.

Dropping out of the top tier are water company Kelda Group, energy generator Drax Group, and Segro, formerly Slough Estates. Each quarter, FTSE's Europe, Middle East and Africa regional committee reviews the indices on the basis of market capitlisation. The company carries this out to "ensure the indices remain an accurate reflection of the market they represent – essential as they form the basis of many pension funds and investment portfolios".

Moving to the top tier means the volume of trading in the companies is likely to soar, as the index tracker funds pile in. The FTSE 100 also has a reserve list in case companies are bought or de-list for some other reason between quarterly reviews. That list currently contains TUI Travel, Thomas cook Group, First Group, the London Stock Exchange, Invensys and Ladbrokes.

There was more movement on the FTSE 250 which saw Moneysupermarket.com, Gem Diamonds and Ferrexpo listing for the first time.