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Dixons Carphone is downgraded to the FTSE 250 in reshuffle

Dixons Carphone has been chucked out of the UK's top tier index after seeing its stock price plunge amid rising import costs and increasing competition from online retailers.

The electrical and mobile phones giant will be downgraded to the FTSE 250 as part of the FTSE Russell EMEA Committee's quarterly review of listed firms, alongside outsourcing giant Capita.

Companies listed on the UK stock market are reviewed four times a year and reshuffled among the indexes based on their market capitalisation, a measurement derived from a firm's share price.

Shares in Dixons Carphone have lost nearly 20% of their value over the past six months - dropping from around 389p in early September to around 310p - and 13% from their January peak of 358p.

Helal Miah, an investment research analyst at The Share Centre, said: "Dixons Carphone's share price has dropped off of late as a result of increasing competition within the sector, particularly from the likes of Amazon."

He added that higher import costs following the post-Brexit collapse of the pound have impacted the company, which recently warned that it was preparing for all eventualities due to rising uncertainty.

Outsourcing giant Capita also faces relegation to the FTSE 250 following difficult year for the group, which saw shares plummet to 10-year lows after sounding the alarm over full-year profits in September.

It said at the time that the Brexit vote was partly to blame for a slowdown in trading, amid ''continued delays in client decision-making'' and subsequently announced plans in December to sell assets to shore up its balance sheet, on top of a cost-cutting drive.

Pest control group Rentokil Initial and Scottish Mortgage Investment Trust are set to take their place on the blue chip index.

Mr Miah said: "Scottish Mortgage Investment Trust was loitering around the promotion zone last quarter.

"With 95% of its holdings weighing towards international investments, it's possible that its recent success is as a result of it benefiting from the weaker pound."

The stock promotions and downgrades are set to take effect on March 20.

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