UPDATE 4-LSE Q1 beats forecast but market still tough

* Revenue down 8 pct, beats analyst expectations

* Market conditions to remain challenging

* Post-trade revenues up 12 pct

* Stock rises 3 pct (Adds FT report in paragraphs 10 and 11)

By Daisy Ku

LONDON, July 15 (Reuters) - The London Stock Exchange (LSE.L) saw revenues fall by less than expected in the first quarter, providing a boost for its new head Xavier Rolet as he starts cutting costs and lowering tariffs.

The three-centuries-old bourse, which is losing market share to a raft of aggressive newcomers, said on Wednesday that weak trading cut revenues by 8 percent in the three months to end-June, warning that the outlook remained tough.

"While market conditions are likely to remain challenging in the near term, the Group is taking actions to ensure we are in good shape and responding fast to changing markets," Rolet said in a statement, delivering his maiden results.

Trading platforms such as Turquoise, Chi-X, Nasdaq OMX (NDAQ.O) and BATS are some of the low-cost newcomers in the market, as new European Union rules are forcing prices down and allowing them to rapidly gain market share.

First-quarter revenues at the LSE -- which also runs the Milan bourse -- stood at 161.9 million pounds ($263.4 million), above the 151.4 million pound average forecast of four analysts, sending its stock up 3 percent by 1251 GMT.

"Although better-than-expected revenues have been reported today, strategic challenges look to remain for the new CEO," Citigroup analysts said in a note.

The LSE's market share fell to 70 percent in June, from 80 percent at the start of the year. [ID:nL1878202]

VALUES PLUNGE

The LSE has responded by announcing a new tariff structure effective September, to encourage trading. People familiar with the matter have said it is cutting about 10 percent of its staff to save costs. [ID:nLP509367]

"A new, leaner organisation structure is taking effect, new trading tariffs for UK cash equities trading have been announced, and work continues to ensure the Group is well placed to capture market opportunities," Rolet said.

Thursday's edition of the Financial Times reported that Rolet said the LSE is planning to launch a new market for the trading of corporate bonds aimed at retail investors.