October 31, 2006	Tuesday	Shawwal 7, 1427

LONDON, Oct 30: European stock markets dropped on Monday, weighed down by unexpectedly weak US growth data last weak which has led to heavy losses for Asian and US share prices, traders said.

London's FTSE 100 index of leading shares fell 0.62 per cent to 6,122.80 points, Frankfurt's DAX 30 index lost 0.71 per cent to 6,218.01 points and in Paris the CAC 40 index slid 0.92 per cent to 5,346.30.

The DJ Euro Stoxx 50 index of top eurozone shares decreased 0.87 per cent to 3,982.27 points. The euro stood at 1.2727 dollars.

Europe's main indices had struck their highest levels since early 2001 last week, amid all-time record highs for Wall Street's Dow Jones share index, before US shares recoiled Friday following disappointing US growth figures.

The US Commerce Department estimated Friday that the American economy expanded at a 1.6 per cent annual rate between July and September, its slowest growth since the first quarter of 2003, when growth was 1.2 per cent.

Share prices also took a knock in London on Monday from poorly-received company news.

Pearson tumbled 1.09 per cent to 772.5 pence, despite the British publishing company revealing it was on track to post its highest profits ever in 2006.

The market focused on the group's performance for the first nine months, which showed operating profit up 25 per cent and underlying profit increasing by 15 per cent.

Broker Panmure Gordon reiterated its “sell” advice and said headline profits came in broadly as expected but not enough to spark upgrades.

Elsewhere, mining stocks were hit by profit-taking after last week's strong gains. Xstrata dropped 1.46 per cent to 2,232 pence, Rio Tinto lost 1.17 per cent 2,863 pence and BHP Billiton offloaded 1.18 per cent to 1,009 pence.

Russian steel maker Severstal meanwhile set a price range of 11.0-13.5 dollars (8.65-10.61 euros) for its planned initial public offering on London's stock market.

Severstal, the world's sixth-biggest steel maker, had announced plans for the flotation earlier this month after failing to merge with Arcelor, which preferred a tie-up with steel giant Mittal.

On Wall Street, the Dow Jones Industrial Average index closed down 0.60 per cent at 12,090.26 points on Friday following a much weaker-than-expected reading on third-quarter economic growth.

US growth on an annualized basis slowed abruptly to 1.6 per cent, against forecasts of 2.1 per cent, and compared to second-quarter growth of 2.6 per cent.The Dow Jones index still finished out the week above 12,000 points, a barrier it smashed through for the first time last week as investors cheered a flurry of third-quarter corporate earnings reports.

The technology-heavy Nasdaq composite meanwhile closed down 1.20 per cent at 2,350.62 points on Friday, while the broad-market Standard and Poor's 500 index ended 0.85-per cent lower at 1,377.34.—AFP