UK stocks : European shares slip as investors cash in on recent gains
"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 ($263.4 billion) 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 0.5 percent, among the worst hit sectors, weighed by a bearish note from Barclays in which it cut its recommendation on Total , off 0.7 percent.
DAIMLER STRONG DRIVER
German carmaker Daimler gained 2.5 percent to add the most points to the FTSEurofirst 300 index.
The company has made a push to revive its China sales, and traders said the stock was up on hopes that it could benefit from an improvement in the Chinese economic outlook and outperform its rivals.
Dutch chemicals group AkzoNobel was the top-performing stock on the FTSEurofirst 300, rising 7.1 percent on plans to sell a north American unit to PPG Industries for $1.1 billion.
"We see this disposal as a likely trigger event for the stock, removing as it does one of the most troublesome sources of poor returns within the group," Canaccord Genuity analysts wrote in a research note, keeping a "buy" rating on Akzo.
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