FTSE at two-week low as banks and Reckitt fall

The FTSE returned to a downward path today to close at a two-week low after household goods giant Reckitt Benckiser broke the news that its chief executive had unexpectedly stepped down.

The FTSE 100 lost 46.6 points or 0.8 per cent to close at 5,963.80 as banks and miners also suffered, with fears over Asian inflation and Greek debt restructuring also weighed on confidence.

“Concerns about rising inflation in Asia have pulled the rug out of yesterday’s recovery after Singapore tightened monetary policy overnight,” said CMC Markets analyst Michael Hewson said.

“Concerns about rising Chinese inflation figures tomorrow has seen mining stocks slide back, despite news that Glencore’s impending flotation will see the company go straight into the FTSE100 when it starts trading, post IPO.”

Reckitt Benckiser, which makes cleaner Cillit Bang and owns brands such as Durex and Scholl, fell 7.5 per cent to 3,115p after the shock retirement of chief executive Bart Becht.

Its fall was not helped by poor news from FTSE 250 consumer goods producer PZ Cussons, which said its sales had fallen and costs risen in challenging conditions. Its shares also lost 3.9 per cent to finish at 328p.

And electrical retailer Dixons lost 8.4 per cent to 13.18p as it said it would pull out from Spain as the market there was so weak.

Banks were hit by a new report from the International Monetary Fund warning that high levels of bank debt posed a risk to global financial stability, with $3.6 trillion (£2.2 trillion) coming due in the next two years alone.

Barclays closed 2.3 per cent lower at 301.8p while RBS ended 1.4 per cent don at 43.53p.

Miners fell as some base metal prices slipped and investors shied away from riskier assets. Antofagasta finished down 3.6 per cent at 1,355p, Kazakhmys lost 2.9 per cent to end at 1,368p and ENRC 2.3 per cent 909p.

Oil giant BP also lost 0.9 per cent to end at 460.05p, after a confrontational annual general meeting and the news that it had won a month’s reprieve on its $16bn share swap deal with Russia's Rosneft.

Defensive stocks such as engine-maker Rolls Royce (up 1.5 per cent), G4S (up 1.4 per cent) and Unilever (up 0.7 per cent) offered some light amid the gloom.

US markets opened similarly lower but inched higher as investors reacted to concerns over higher inflation.

Goldman Sachs pulled financial stocks down after a Senate subcommittee condemned its investment practices and said it would be referred to the Department of Justice for an investigation.

News that president Barak Obama had made progress with the US budget deal and plans to cut the deficit helped support stocks but the key indices finished in the red.

The Dow Jones industrial average closed down 18.39 points, or 0.15 per cent, at 12,289.38. The Standard & Poor's 500 inched up 0.21 points, or 0.02 per cent, to end at 1,314.62. The Nasdaq Composite dipped 1.2 points, or 0.04 per cent, to 2,760.32.

Google is scheduled to report results after the US market's close, with analysts forecasting revenue growth of 25 per cent at the search giant.