re: Ann: ZSP: SandP Announces June SP/ASX 200... Pardon my ignorance, but what is the significance of this demotion. The SP dropped a lot the other day. Was it mainly because of this?
When a stock drops out of the index, index funds i.e. funds which reflect the makeup of a particular index, in this case the ASX/200, sell or otherwise dispose of their holding to reflect the new makeup of the index. This usually puts pressure on the share price. But this shouldn't necessarily detract from the fundamentals. Some companies have thrived after their exclusion from the index.
The reasons for adding or removing a company from an index can be varied but it is explained here:
http://www.cftech.com/BrainBank/FINANCE/SandPIndexCalc.html#anchor3360509
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