MSCI winners

Porsche Securicor Close Brothers Daily Mail and General Trust

BMW recovered from its ejection to close slightly up on the day at 41.49.

But UK drinks giant Allied Domecq and electricity giant PowerGen lost ground after they were both knocked out of the MSCI. The stocks lost 15 to 418 and 1 to 715 respectively.

In London, the FTSE 100 index ended up 26.6 points or 0.45% at 5,941.6, while Germany's benchmark Dax index closed 63.00 or 1.02% up to 6,249.87 points. France's blue chip CAC-40 index finished up 13.80 or 0.24% at 5,652.04 points.

About $500bn of investors money worldwide is tied directly to MSCI indexes, through passive tracker funds.

Another �3,000bn is invested by fund managers who use the MSCI listings as the basis of their investment decisions.

Monday's re-jig happened because the MSCI wanted its indexes to reflect the number of shares available for trading, rather than total number of shares.

MSCI losers

Credit Lyonnais Commerzbank Allied Domecq PowerGen

The change will most affect companies in which the government or a single family, such as BMW, holds a substantial number of shares.

Countries such as the UK, where shareholders tend to hold more stock, are likely to benefit from an inflow of fresh investment as a result of the changes.

The UK's "weighting", its status within the MSCI indexes, has been boosted as a result of Monday's changes, leading to hopes of fresh inflow of funds to boost the UK's beleaguered markets.

The full impact of the changes will not be felt until later in the year.

Surprise inclusions

Among the MSCI winners were British company Securicor, which was 5p firmer at 179p on its inclusion, and Porsche, which gained more than 3%, as it benefited from rival BMW's exclusion.

Among the surprise inclusions in the index was UK merchant bank Close Brothers, which gained 67.5p to 1045.

Publisher Daily Mail and General Trust was another stock to benefit from the re-weighting, gaining 4% to 805.

Associated British Ports also gained, putting on 3.5p to 428.5.

But business support services specialist Amey - another chosen to grace the index - reversed earlier gains to end down 1.5 at 411.

Porsche gains

BMW was the only German carmaker not to be included in the MSCI indices, a step taken on a technicality rather than merit as MSCI sought to cap the weighting of German automakers.

"MSCI's target was to have a representative (sector) weighting of 85% of the German auto industry. Putting Porsche in gets you close to that target, putting BMW in would have taken you to 93-94%," one equity strategist said.

"It sounds harsh but it is how they work. It is not a reflection on BMW."

Porsche has gained 28% since early April on early signs of a recovery in its key US market.

Fund managers said although the effect of MSCI's changes on certain individual stocks was marked, its effect on the market as a whole was relatively muted on Monday.