European shares dip on fiscal cliff wariness

LONDON Fri Nov 30, 2012 3:11am EST

LONDON Nov 30 (Reuters) - European stocks dipped on Friday, relinquishing some of the previous session's sharp gains, as mixed signals about U.S. budget talks injected a note of caution into markets.

The FTSEurofirst 300 was down 0.2 percent at 1,119.74 by 0808 GMT, having jumped 1.1 percent on Thursday to hit its highest closing level since July 2011 on expectations that U.S. politicians would reach a deal to avoid growth-sapping austerity measures.

But House of Representatives Speaker John Boehner dampened investors' optimism after the European market close, lowering hopes of a budget deal soon and sending U.S. shares temporarily lower.

"I would say that both sides have no interest in going over the cliff... but the point is that from time to time, you'll have positive news, and negative news, and that will make for a fairly volatile environment," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

"If we get this solved I think we will have a couple of very good months for markets," he said.

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