European Shares Drift Higher, Greek News  Awaited

European shares closed higher after choppy trade on Wednesday as investors watched for signs of progress on a delayed deal to unlock aid to keep Greece solvent.


Greece's international lenders will meet again next Monday, after failing to settle a deal at an overnight meeting where they discussed how to get the country's debt down to a sustainable level. In the meantime, the 31.5 billion euros ($40.1 billion) worth of aid that Greece needs to avoid default is yet to be released.

Following the meeting, Thomson Reuters reported that German Chancellor Angela Merkel told lawmakers at a subsequent closed-door meeting that lower interest rates and an expanded European Financial Stability Fund (EFSF) might potentially fill Greece's financing gap.

The FTSEurofirst 300 index closed provisionally up 0.3 percent at 1,097.42 points, with trading volume at a meager 30 percent of its 90-day daily average ahead of a U.S. public holiday for Thanksgiving on Thursday.

"Our assumptions over the next six months is, on any significant pullback, to buy Europe," Bill O'Neill, chief investment officer for Europe, the Middle East and Africa at Merrill Lynch Wealth Management, said.

"I can see 12-15 percent total returns for European equities next year, but that of course depends on nothing untoward happening in the euro zone and the integration process continuing."

Gains were kept in check by concerns about the U.S.'s $600 billion "fiscal cliff" of spending cuts and tax rises, after Federal Reserve Chairman Ben Bernanke said the Fed lacked tools to protect the U.S. economy from it.

(Read More: What is the 'Fiscal Cliff'?)

Winners and Losers

Shares in telecoms group KPN bounced 6.5 percent from a 10-year low in volume twice the 90-day average, boosted by trader speculation about consolidation in the German telecoms sector.

However, British specialty chemicals firm, Johnson Matthey, closed nearly 6 percent lower after issuing a cautious outlook, dented by weakness in Europe and a volatile U.S. truck market. Trading volume in the stock stood at one and a half times its 90-day daily average.

Randstad closed nearly 5 percent lower after the Dutch staffing company warned of continued drops in sales, especially in Europe, and changed its dividend policy, prompting analysts to expect a dividend cut. Its trading volume was 125 percent of its 90-day daily average.

The news had a negative knock-on effect on peers such as Adecco and Michael Page .