European shares stutter as US budget talks stall
LONDON Dec 20 (Reuters) - European shares stuttered on Thursday as indexes approached overbought levels and budget talks in the United States stalled, with Carnival a big faller on 2013 earnings concerns.
The FTSEurofirst 300 provisionally closed up 1.01 point at 1,143.14, trading in a tight 4 point range all session, with its 14-day relative strength index (RSI) - a widely-used technical momentum indicator - at 67.5, where 70 and above considered as 'overbought'.
Politicians in the United States remained locked in talks to find a deal to avoid a "fiscal cliff" of government spending cuts and tax rises due to take effect in early 2013 that could hurt the world's largest economy.
"Our expectation is that something will get sorted but we also think that it will not be enough," David Moss, director of European equities at F&C Asset Management, said.
"It is clear the economic issues are not going to go away any time soon. Growth is going to be slow for a long period of time ... so I would be surprised if companies were anything other than cautious for 2013," he said.
Investors' nervousness over the earnings outlook for companies was reflected in a 5 percent drop in Carnival in heavy trade after the cruise line operator said advance bookings for 2013 were behind the previous year.