September 01, 2006	Friday	Sha'aban 7, 1427

LONDON, Aug 31:European stock markets weakened on Thursday, despite gains by Wall Street and in Asia owing to evidence that the US economy is stronger than expected, dealers said.

London's FTSE 100 index of leading shares dipped 0.08 per cent to 5,924.60 points, Frankfurt's DAX 30 eased 0.01 per cent to 5,867.11 points and in Paris the CAC 40 fell 0.24 per cent to 5,170.52 points.

The DJ Euro Stoxx 50 index of leading eurozone shares decreased 0.09 per cent to 3,814.32 points. The euro stood at 1.2846 dollars.

Wall Street closed mainly higher on Wednesday after the government revised a touch higher its estimate for second quarter US economic growth.

Japanese share prices rose sharply Thursday, returning above the key 16,000 points level as sentiment won a boost from the upward revision to US gross domestic product (GDP) growth.

In London, Diageo led the fallers early Thursday, slumping 2.61 per cent to 934 pence, after the world's biggest maker of alcoholic drinks reported a rise in annual operating profit that was below analysts's consensus forecast, dealers said.

Losses to the FTSE were limited however by Carnival -- the luxury cruise operator, which surged 4.43 per cent to 2,287 pence following positive broker comment.

French cosmetics company L'Oreal lent support to the CAC 40 after jumping 3.87 per cent to 83.2 euros. Investors dived into the stock after L'Oreal accompanied consensus beating first-half earnings with a forecast for earnings-per-share growth of at least 10 per cent in 2006.

In New York on Wednesday, the Dow Jones Industrial Average closed up 0.11 per cent at 11,382.91 points and the tech-heavy Nasdaq composite ended 0.62 per cent higher at 2,185.73 points.The broad-market Standard and Poor's 500 index finished flat at 1,304.27.

The upward revision to second quarter US growth supported stocks as it suggested the economy was not as weak as had initially been feared.

The Commerce Department said the GDP of the world's biggest economy grew at an annualized rate of 2.9 per cent in the three months ended June, up from an initial estimate of 2.5 per cent.

On Thursday in Asia, the Tokyo Stock Exchange's benchmark Nikkei-225 index finished up 1.69 per cent at 16,140.76 points -- the strongest closing level in a week.

Hong Kong's key Hang Seng Index advamced 0.62 per cent to end at 17,392.3 points, led by property stocks as the US economic data strengthened hopes the Federal Reserve would keep interest rates unchanged, dealers said.—AFP