Wolseley helps lessen FTSE fall as caution prevails before ECB

* FTSE 100 index falls 0.4 percent

* Wolseley (LSE: WOS.L - news) rises after update

* Caution before ECB's policy meeting

* G4S (LSE: GFS.L - news) hit by new scandal (Updates with closing prices and no other changes to text)

By Alistair Smout

EDINBURGH, June 3 (Reuters) - Britain's top share index edged lower in light trade on Tuesday, with most stocks falling in thin volumes ahead of the European Central Bank's meeting this week.

Substantial buying of shares in plumbing supplier Wolseley (Frankfurt: 24W2.F - news) provided some support.

Wolseley rose 1.6 percent to be the top FTSE 100 gainer, after it reported a 5.1 percent rise in third-quarter like-for-like revenue and said it expected sales to grow about 4 percent in the next six months.

"With around 70 percent of its profits generated in the U.S., the company provides a good way of playing the ongoing recovery in housing and construction markets," Killik & Co director of market research Paul Kavanagh said.

Trading in Wolseley shares was 2-1/2 times its 90-day average, and was one of only 20 FTSE 100 stocks in positive territory.

The majority of stocks fell in trading volume of just 60 percent of the index's 90-day average.

The blue-chip FTSE 100 index was down 27.80 points, or 0.4 percent, at 6,836.30 points at the close, not far from a 14-year high of 6,894.88 on May 15. The index is 1.6 percent below its record high of 6,950.60 set in late 1999.

Traders said that investors were reluctant to make strong bets one way or the other ahead of the ECB's meeting on Thursday. Expectations of policy action have helped to pin shares near highs. Tuesday's unexpected euro zone price inflation fall in May, increasing the risks of deflation, piled on the pressure for the ECB to act at its meeting on Thursday.

"He's almost promised too much, so he'll have to deliver something. If he doesn't, the market will tank, and if it does, it's probably priced in," ETX Capital's head of trading, Joe Rundle, said, referring to ECB head Mario Draghi.

The ECB is widely expected to trim its refinancing rate, send its deposit rate into negative territory and launch a long-term refinancing operation targeted at businesses.

Among individual losers, G4S dropped 1.6 percent after the Financial Times reported the global security company was under further pressure as a British government-funded watchdog agreed to investigate its activities in Israel and the Palestinian territories. (Additional reporting by Atul Prakash; Editing by Louise Ireland (Other OTC: IRLD - news) )