European shares edge lower, U.S. fiscal talks eyed
LONDON, Dec 14 (Reuters) - European shares slipped on Friday as investors banked profits after a recent strong run, and some said it was vulnerable to a deeper correction the longer U.S. budget talks remain at an impasse.
The FTSEurofirst 300 provisionally ended down 0.2 percent at 1,133.21, tailing off after a powerful three-week rally which has seen the index rise in 16 out of 20 sessions propelling it to 18-month highs.
Traders said most expected a U.S. budget impasse around the "fiscal cliff" of some $600 billion in tax hikes and spending cuts due to start in January to be sorted out.
"Good news about the fiscal cliff is being priced in hence the risk is definitely to the downside," said Andrew Milligan, head of global strategy at Standard Life Investments, which has 163.4 billion pounds ($263.65 billion) of assets under management.
"There is a small but not negligible possibility that there's gridlock in Congress and that could lead in these conditions to really quite sharp moves in markets because the trading's going to be so thin. But that really will only become apparent in the last couple of days of trading this year."
The STOXX Europe 600 Oil and Gas index ended down 0.6 percent, among the worst hit sectors, weighed by a bearish note from Barclays in which it cut recommendations on a number of firms.