August 16, 2006	Wednesday	Rajab 20, 1427

LONDON, Aug 15: European stock markets ticked lower on Tuesday as investor concerns over inflation offset enthusiasm following the ceasefire in the Middle East, dealers said.London's FTSE 100 index of leading shares slid 0.39 per cent to 5,848.10 points, Frankfurt's DAX 30 index shed 0.45 per cent to 5,666.62 points and in Paris the CAC 40 lost 0.17 per cent to 5,038.19.

The DJ Euro Stoxx 50 index of leading eurozone shares decreased 0.28 per cent to 3,708.81 points. The euro stood at 1.2720 dollars.

Wall Street's major indexes had closed higher on Monday on hopes that a UN-brokered agreement would seal a peace deal in the Israeli-Lebanon crisis, coupled with a fall in oil prices, dealers said.

Analysts said that investors were unwilling to trade aggressively ahead of US producer prices data, amid fears that inflationary threats are mounting, despite a string of US interest rate hikes from the Federal Reserve.

Meanwhile, British 12-month inflation eased to 2.4 per cent in July from June, in line with market expectations, but above the Bank of England's 2.0-per cent target.

The BoE hiked rates earlier this month to 4.75 per cent.

Investors remain concerned about a scenario in which central banks will be forced to raise their interest rates to combat inflation which may choke off global economic growth.

The European energy sector took a hit on Monday as global oil prices continued falling amid the ongoing Middle East ceasefire and news that BP would maintain about half of its output in a key Alaskan oil field.

In London, Cairn Energy shares dropped 1.83 per cent to 1,983 pence, BP sank 0.49 per cent to 613 pence and Anglo-Dutch giant Royal Dutch Shell saw its 'B' shares fall 0.67 per cent to 1,913 pence.In Paris, shares in French oil company Total slid 0.47 per cent to 52.8 euros.

Back on Wall Street, the Dow Jones Industrial Average had closed up 0.09 per cent at 11,097,87 points on Monday, while the Nasdaq index finished the day 0.55 per cent higher at 2,069.04 points.

The Standard and Poor's 500 index ended up 0.12 per cent at 1,268.21 points.—AFP