* Miners fall on concern over China demand
* LSE up on TMX buy; D.Boerse, NYSE Euronext in merger talk
* For up-to-the-minute market news, click on []
By Dominic Lau
LONDON, Feb 9 (Reuters) - European shares fell on Wednesday,
retreating further from 29-month highs hit earlier this week,
weighed down by miners on concerns over demand from China,
though positive corporate results offered some support.
Several heavyweight UK stocks, including BP <BP.L>, Shell
<RDSa.L> and GlaxoSmithKline <GSK.L>, traded ex-dividend, partly
leading the UK FTSE 100 <> to fall 0.6 percent and
underperform German DAX <> and French CAC 40 <>.
Miners suffered, with the STOXX Europe 600 basic resources
index <.SXPP> down 1.9 percent, as copper <CMCU3> fell,
pressured by questions over demand after top consumer China
raised interest rates on Tuesday.
The FTSEurofirst 300 <> index of leading European
shares closed down 0.4 percent at 1,171.43 points after falling
0.1 percent on Tuesday, though the benchmark is still up 4.4
percent so far this year.
"The market has good momentum but is there sufficient
momentum to drive it on substantially higher?" said Philip
Lawlor, investment strategist at Smith & Williamson in London.
"In terms of drivers, we know liquidity is the real driver --
corporate M&As, buybacks, the liquidity from QE2 spilling over."
Federal Reserve Chairman Ben Bernanke said U.S. unemployment
remains too high despite increasing signs of strength in the
recovery, suggesting the U.S. central bank would push on with
its $600 billion stimulus programme. []
"Our view is that gently, not aggressively, we are not mega
bearish, take money off the table. We are looking to buy the
market at a lower level," Lawlor said.
On M&A, the London Stock Exchange <LSE.L> is to buy Canada's
TMX <X.TO> to create the world's fourth-largest bourse, while
Deutsche Boerse <DB1Gn.DE> and NYSE Euronext <NYX.N>, two of the
world's largest exchange operators, said they were in "advanced
merger discussions". [] []
Shares in LSE rose 3.1 percent after rising as much as 10.9
percent to 989 pence, with some traders saying the surge in LSE
shares offered a chance to short the stock.
"There is no real mutual benefit because what's the Canadian
market exposure in the grand scheme of things?" a trader said.
"I have been shorting it today from the 975-978 pence
level," he said, adding that the risk was a counter bid being
offered.
Trading in Deutsche Boerse shares was halted before the
announcement. They were up 1.7 percent before the halt.
RESULTS HELP
Positive results from the likes of Syngenta <SYNN.VX>, the
world's largest agrochemical group, and French utility Suez
Environnement <SEVI.PA> also offered some support to the market.
Both stocks rose 4.4 percent.
Danish wind turbine maker Vestas <VWS.CO> rose 3.1 percent
after it swung back into profit for the fourth quarter.
So far more than 60 percent of the 71 European companies
that have reported fourth-quarter earnings have beat or met
revenue forecasts, with only 37 missing expectations, data from
Thomson Reuters StarMine shows.
But just 47 percent of them have beat or met analysts'
earnings expectations, with the remainder missing market
forecasts.
Among those that missed earnings estimates was UK consumer
goods group Reckitt Bencksier <RB.L>, which shed 5.1 percent.
Technical indicators had shown the market could be ripe for
a pull back, with the relative strength index on the euro zone's
blue chip Euro STOXX 50 <> index reaching 68 on
Tuesday. Seventy and above is considered overbought territory.
However, Euro STOXX 50, down 0.4 percent on Wednesday,
carries a 12-month forward price-to-earnings of 9.8 times,
compared with a 10-year average of 13.6 and the S&P 500's <.SPX>
13.2, Thomson Reuters Datastream shows.
(Editing by Hans Peters)
