London Stock Exchange rises 3.1% after TMX deal while Footsie slides

FTSE:6,052.99 (–39.04) Mid-250:11,796.61 (–33.93) Small Cap:3,293.58 (–16.37)

UK STOCKS retreated from the highest level since May 2008 yesterday, as Reckitt Benckiser forecast slowing sales growth and weaker metals prices dragged mining shares lower.

Reckitt Benckiser, the world’s largest maker of household cleaners, slumped the most in two years after saying it expects 2011 sales to rise at a slower pace than last year as the global market stagnates.

London Stock Exchange climbed 3.1 per cent as it agreed to buy Toronto Stock Exchange owner TMX in an all-share deal.

The benchmark FTSE 100 Index lost 39.04, or 0.6 per cent, to 6,052.99 at the close in London, the first decline in four days.

The gauge has advanced 2.6 per cent this year, bringing its rally since March 2009 to 72 per cent, as investors bet a strengthening global economic recovery will help corporate earnings.

“We have seen traders using the weaker copper price as an excuse to take some profits off the table in mining equities,” said Joshua Raymond, a markets strategist at City Index in London.

Earnings at Reckitt Benckiser “triggered cautious stances from brokers, and investors have sold out of the stock as a result.”

Reckitt Benckiser dropped 5.1 per cent to 3,270p, the biggest decline since December 2008. The company forecast sales growth of 4 per cent this year, excluding the impact of currency fluctuations and acquisitions. Revenue on that basis expanded 6 per cent last year, it said.

BHP Billiton, the world’s biggest mining company, dropped to 2.1 per cent to 2,508p and Antofagasta slid 3.8 per cent to 1,456p.

Copper, lead and tin prices retreated on the London Metal Exchange.

Xchanging slumped 52 per cent to 56.5p, the biggest drop since its initial share sale in April 2007.

LSE, the 210-year-old bourse operator, climbed 3.1 per cent to 920p after it agreed to buy TMX in an all-share transaction valued at about C$3.2 billion ($3.2 billion) as the companies cut costs to counter lost market share. LSE shareholders will own 55 per cent of the enlarged group, while TMX investors will hold 45 per cent.

CSR gained 9.3 per cent to 445.3p as the UK maker of chips used in Nokia Oyj mobile phones gave revenue guidance that exceeded analysts’ estimates. – (Bloomberg)