European shares slip on lack of US budget progress

LONDON Tue Dec 4, 2012 3:13am EST

LONDON Dec 4 (Reuters) - European shares edged lower on Tuesday, led by the basic resources sector, with traders citing persistent concern about the lack of progress in the United States over talks to delay growth-curbing austerity measures.

The pan-European FTSEurofirst 300 index was down 0.1 percent to 1,120.45 points, although the euro zone's blue-chip Euro STOXX 50 index rose 0.1 percent to 2,584.26 points.

The White House on Monday dismissed a budget deal proposal from Republicans that included tax reforms and spending cuts, saying it did not meet President Barack Obama's pledge to raise taxes on the wealthiest Americans.

Berkeley Futures associate director Richard Griffiths said worries over the U.S. budget situation was causing many traders to err on the side of caution by selling shares to cash in on the back of recent rallies.

"There's a lot of doubt about it at the moment, hence stock markets are drifting lower. Sentiment has just turned a bit negative recently," said Griffiths.

Griffiths said some clients were looking to sell European equity markets at the top of their recent trading ranges, at around the 2,625 point level for the Euro STOXX 50 index and around 7,500 points for Germany's DAX index.