European shares edge down
International / 13 Dec '12, 1:29pm
European shares slipped on Thursday as the Federal Reserve's delivery of fresh stimulus for the US economy was overshadowed by concerns that budget talks might yet fail to head off what would be a crushing blow to growth.
The FTSEurofirst 300 was down 0.3 percent at 1,136.38 by 11:09 SA time, erasing Wednesday's 0.1 percent gain.
The Fed announced a new round of monetary stimulus on Wednesday and indicated interest rates would remain near zero until unemployment falls to 6.5 percent.
That was largely expected, and markets were more focused on whether legislators would miss a year-end deadline to avert the “fiscal cliff” of some $600 billion of tax hikes and spending cuts due to start in January.
Fed chairman Ben Bernanke warned on Wednesday that monetary policy would not be enough to offset damage if the budget talks failed.
“We'll get a slow drift into the year end... there are no real factors that are going to come in to send it significantly higher. The overhang of the fiscal cliff is going to weigh on the upside to a certain extent,” Michael Hewson, senior analyst at CMC Markets, said.
Energy stocks came under pressure on Thursday, off 0.4 percent and giving back nearly all of the previous session's rise, with BG Group among the worst off, down 1.4 percent.
The oil company named Chris Finlayson, currently managing director for BG Advance, as its new chief executive from the beginning of January, replacing Frank Chapman who has had a 12-year tenure at the helm of BG.
The euro zone's blue-chip Euro STOXX 50 was flat at 2,629.74, having hit a fresh closing high for the year on Wednesday, at 2,630.34, and closed above the 200-week moving average, at 2,580, last week.
Some technical strategists were optimistic.
“It's looking quite good,” Phil Roberts, chief European technical strategist at Barclays Capital, said.
“You've got breaking moving average resistance - that's a medium-term bullish signal, as is breaking the range of the last 12 months.”
Roberts targets 2,712, a projection off the low in May 2012 of the move off the Sept 2011 low to the high in March 2012. - Reuters