The group, formed from the pounds 4.3bn merger of the UK struggler Reckitt & Colman and its Dutch rival Benckiser flushed 10p lower to 722p after surprising the market with the announcement of a trading statement.
The news immediately wiped out Reckitt's earlier gains as dealers braced themselves for some bearish comments. According to the rumours, the company will this morning report sluggish growth in some of its core markets. Apparently, the old Reckitt & Colman has found it difficult to sell its Lemsip cough tablets and Harpic bleach in the slowing Latin American economies.
In common with rivals such as Gillette and Unilever, Reckitt is also expected to have experienced margin pressure in the region, which accounts for about 13 per cent of its turnover and profits. Market-watchers believe that the slowdown in sales could prompt analysts to lop some pounds 10m off their forecasts of Reckitt & Colman's full year profits of around pounds 200m. This near 6 per cent reduction could be offset by a good showing from Benckiser, the maker of dishwashing powder Finish.
On the plus side, the statement is rumoured to contain a positive update on the promised merger cost-savings of pounds 75m a year from 2001.
The day's other intriguing rumours concerned the go-go media sector. Pearson, the publisher of the Financial Times and Penguin books, soared 117p to a best-ever 1,638p amid a welter of rumours. Rehashed talk of a strike by US giant Time Warner returned, while more imaginative whispers of a merger with EMAP, 118p higher to 1,223p, or even a float of FT.com, was also heard.
Other, more boring dealers said that Pearson's strength was due to its illiquid stock and talk of strong advertising revenues. The whispers of buoyant ads, heard at a US media conference, also helped Daily Mail & General Trust, 303p higher at a record 4,096p and Granada, 18.25p better at 575p.
Fellow TV giant BSkyB jumped 22.5p to 813.5p on speculation that French conglomerate Vivendi was prepared to sell its 20 per cent stake to a trade buyer. However, other dealers said that Vivendi was actually looking at raising its Sky holding.
The overall market was once again let down by a couple of heavyweight sectors and its United States brother. The FTSE 100 closed 33.1 lower to 6,660.9. A wobbly opening in the Dow dampened sentiment but it was weakness among banks and oils that did most of the damage.
A weakening crude price unsettled BP Amoco, 10.5p lower to 611.5p, and Shell, 13p lower to 457p. The latter was further unsettled by news that Dordtsche Petroleum, one of its Dutch shareholders, had received a foreign hostile bid. A takeover could lead to the sale of its near-9-per cent stake in Shell.
Similar news that one of its Dutch shareholders had been suspended by the Amsterdam exchange sent Unilever 13.5p lower to 713p.
Among other oils, LASMO fell 5.25p to 124p after the departure of its managing director. However, speciality chemicals group Burmah rose 7p to 1150p on talk of a joint venture, or even a bid, from BP.
Banks were undone by profit taking and fears of a rate hike on Thursday. Arch-rivals Bank of Scotland dropped 39.5p to 717.5p, Royal Bank of Scotland shed 52p to 1,139p, while their target NatWest fell 53p to 1,357p. Insurer Royal & Sun lost 19.5p to a yearly low of 356p on fears of bad weather losses in Scandinavia. However, mortgage lender Abbey National rose 4p to 1019p on rumours of a good meeting with broker Schroder.
COLT Telecom bucked the weak market with a 190p rise to a record 2,695p, while vague bid talk pushed EMI 25p higher to 559p. Marks & Spencer bagged a 5.25p rise to 250.25p on whispers that it has found a chairman.
Good figures from the British Retail Consortium and rumours that today's trading statement will be good sent retailer Kingfisher 7.5p better to 562.5p.
Midcappers followed the blue chips lower and the FTSE 250 ended 33.3 down to 6276.1 as several stocks looked off-colour.
The needleless-syringe maker Powderject collapsed 152.5p to 830p after delaying the development of an important protein. Poor interims sent chemical group BTP 53.5p lower to 299p, while the expected profit-warning pushed telecoms equipment maker Filtronic, 212.5p down to 1,832.5p. Troubled retailer Storehouse, 8p lower to 45p, was undone by a large share sale by an institution, probably Prudential. However, rival Debenhams rose 11.75p to 185p on vague corporate action whispers.
The Small Cap outperformed its bigger brothers and recorded another all- time high after a 18.8-point rise to 2962.8.
Menswear retailer Blakes Clothing, where entrepreneur Luke Johnson is a shareholder, was suspended after a 3.75p rise to 7.75p on whispers of a large deal. Engineer GEI, another of Mr Johnson's investments, rose 4.5p to 16.75p
Shoes group FII was kicked 14p higher to 47.5p on whispers of a bid or management buyout, while Internet investor Durlacher jumped 440p to a 1,642.5p best after two of its directors sold shares for pounds 3.7m each.
SEAQ VOLUME: 1.89bn
SEAQ TRADES: 116,067
GILTS INDEX: 106.32 +0.72
KEEP AN eye on the furniture group Home Place. The shares, traded on the Ofex market, were flat at 14.5p, despite rumours of an imminent deal. Chairman Mervin Fogel, former boss of DIY group Texas Homecare, should be about to acquire three stores in blue-chip locations. The purchases, to be added to Home Place's stores in Hendon and Lakeside, could be financed with a share issue which could double the group's market value.
THE TV and video group VTR yesterday beamed 40.5p higher to a five-year high of 181.5p on talk of a major deal. The group, which specialises in video post-production and film distribution, recently sold one of its subsidiaries to rival South Beach group for around pounds 4m and some investors believe it could use the proceedings for an acquisition. Others suggest VTR has caught the eye of a larger rival and could soon be the target of a bid.