October 20, 2006	Friday	Ramazan 26, 1427

LONDON, Oct 19: European shares retreated on Thursday, mirroring losses in Asia despite a record overnight showing on Wall Street, dealers said.

However, stock markets in Paris, London and Frankfurt remained within reach of multi-year peaks struck earlier this week.

London's FTSE 100 index of top shares fell 0.45 per cent to 6,122.70 points on Thursday, Frankfurt's DAX 30 index sank 0.29 per cent to 6,164.67 and in Paris the CAC 40 index shed 0.40 per cent to 5,339.86 points.

The DJ Euro Stoxx 50 index of leading eurozone shares decreased 0.43 per cent to 3,974.15 points.

The euro stood at 1.2569 dollars. The Dow Jones index had notched up another closing record on Wednesday, after bursting through to 12,000 barrier for the first ever time.

Global stock markets have been buoyed in recent weeks as investors have grown more bullish about the resilience of the US economy to withstand its current downturn amid weak crude oil prices.

Japanese stocks went into reverse on Thursday as investors stayed cautious ahead of earnings reports.

In London, the financial sector provided the main drag on blue chips as cautious broker comment added to investor jitters as the reporting season in the US rumbled on.

Broker Credit Suisse said in the near term it thinks a neutral stance towards banks was “sensible” as the sector has become highly correlated to the volatile oil price.

British bank Alliance and Leicester shed 1.68 per cent to 1,110 pence, Bradford and Bingley decreased 1.16 per cent to 467.5 pence and HBOS fell 1.01 per cent to 1,078 pence.

In Frankfurt meanwhile, shares in SAP tumbled 1.99 per cent to 161.33 euros.

SAP, the world's leading maker of business software, published a robust set of third-quarter results on Thursday, but disappointed the markets by saying that full-year software licence sales were unlikely to come out above target.

In US deals on Wednesday, the Dow Jones Industrial Average had closed up 0.36 per cent at a record high of 11,992.68 points, after earlier striking a all-time intra-day high of 12,049.51.

A healthy start to the third-quarter corporate earnings season in the past week has also helped propel the Dow to uncharted heights, traders said.

The US index failed to hold above the 12,000 points mark, however, and had to be satisfied with a gain of 0.36 per cent while optimism over the new record was tempered by news the technology-rich Nasdaq composite fell.

The Nasdaq closed down 0.33 per cent at 2,337.15 while the broader-market Standard and Poor's 500 index finished up 0.14 per cent to 1,365.96 points.

In Asian trading on Thursday, the Tokyo Stock Exchange's benchmark Nikkei-225 index slid 0.61 per cent to 16,551.36 points.

Hong Kong's key Hang Seng Index closed down 0.34 per cent at 17,986.97 points.—AFP