August 17, 2006	Thursday	Rajab 21, 1427

LONDON, Aug 16: European stock markets mostly slid on Wednesday in cautious trade, as investors looked to the utilities sector and consolidated recent gains ahead of new US inflation data, dealers said.

London's FTSE 100 index of leading shares sank 0.66 per cent to 5,859.00 points, in Paris the CAC 40 lost 0.15 per cent to 5,107.40 points, and Frankfurt's DAX 30 index eased 0.01 per cent to 5,776.17 points.

The DJ Euro Stoxx 50 index of leading eurozone shares meanwhile increased 0.09 per cent to 3,769.70 points.

The euro stood at 1.2784 dollars. Wall Street shares had rocketed Tuesday with investors hoping that a surprise drop in core US wholesale inflation will convince the Federal Reserve that further interest rate hikes are not needed.

In London, the biggest FTSE 100 loser was British Energy, which plunged 6.19 per cent to 234.25 pence.

Other European utility issues were also under the cosh, undermined by news that Germany's RWE has attracted only two bidders for its Thames Water business, and by a cautious note from Evolution Securities, cutting target prices across the board in the sector, mainly on valuation grounds.

In Frankfurt, the share price of RWE slumped 1.18 per cent to 72.23 euros.

The second-biggest energy supplier in Germany had confirmed last week that it was looking to either sell or float Thames Water, which is Britain's largest water and waste group.

Across in Paris, shares in French utility services group Veolia sank 1.16 per cent to 41.39 euros.

In US trade on Tuesday, the Dow Jones Industrial Average had closed up a hefty 1.19 per cent at 11,230,26 per cent, notching up its biggest daily percentage gain since July 24.

The Nasdaq index finished the day 2.22 per cent higher at 2,115.01 points, its largest leap since June 29.

The Standard and Poor's 500 index ended up 1.37 per cent at 1,285.58 points.

Stocks had charged higher after the government said the headline producer price index (PPI) rose a scant 0.1 per cent in July from June. But the core rate -- excluding food and energy -- fell surprisingly by 0.3 per cent.—AFP