Step 1: Understanding enzyme E of phage $\phi$X174.
Phage $\phi$X174 infects bacteria and produces an enzyme called "E protein." This protein functions as a lysis enzyme that stops bacterial cell wall synthesis by preventing peptidoglycan formation.
Step 2: Evaluating the options.
(A) Correct — enzyme E inhibits peptidoglycan synthesis, causing host cell lysis.
(B) Incorrect — it does not affect viral RNA synthesis directly.
(C) Incorrect — lipid metabolism is not targeted.
(D) Incorrect — dsDNA replication is unrelated to this enzyme.
Step 3: Conclusion.
Enzyme E blocks peptidoglycan synthesis, leading to host cell lysis and phage release.