Weak technology stocks weigh on European equities
* FTSEurofirst 300 slips 0.1 pct to 1,140.80 points
* Euro STOXX 50 down 0.1 pct to 2,653.27 points
* Tech stocks weaken after Ericsson makes writedown
* Traders looking to go into year-end with "flat" books
LONDON, Dec 20 (Reuters) - European equity indexes slipped from multi-month highs on Thursday after new signs of friction in U.S. budget talks, while a fall in mobile network maker Ericsson also weighed on markets.
Many traders said they were looking for opportunities to sell shares into any rally in order to lock in their profits before the year-end, adding that some equity indexes looked "overbought" on a technical basis and therefore poised for minor declines.
The pan-European FTSEurofirst 300 index, which closed near a fresh 19-month high on Wednesday, slipped 0.1 percent to 1,140.80 points, while the euro zone's Euro STOXX 50 index fell 0.1 percent to 2,653.27 points.
The STOXX Europe 600 technology index was the worst performing sector, falling 0.5 percent after Swedish group Ericsson announced a fourth-quarter writedown, pushing its shares down 1.5 percent.
"There's too many suppliers in that sector," said Clairinvest fund manager Ion-Marc Valahu, whose portfolio does not contain any European technology stocks.
U.S. BUDGET UNCERTAINTY
U.S. politicians remain 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.
Although most investors expect a deal on the U.S. budget to be struck eventually, signs of delays have opened the way to fresh equity index falls, with moves often exacerbated since volumes have been thin ahead of the Christmas holiday period.
Some traders added that European equity indexes were looking "overbought" on a technical chart basis, giving them further reason to sell shares.
The Euro STOXX 50 had stepped into "overbought" territory on its 14-day its Relative Strength Index (RSI) for the first time since 2009, which meant some investors could be looking to lock in some profits at this level.
"Many investors are closing their positions to be flat into the New Year," a Milan-based trader said. "There's very little interest in opening new positions."
Central Markets senior broker Joe Neighbour said there were still some traders looking to use declines in the equity market to buy stocks on the cheap ahead of a possible rally in January, but on the whole investors were not taking on big positions.
"If there are profits to be had, we'll be looking to take them off the table. The dip buyers still seem to be there to look to take the market back up but we'll be looking to keep flat as we go into the new year," he said.
- Obama makes rare campaign trail appearance, people leave early
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders |
- Obama makes rare campaign trail appearance, some leave early
- Nigeria declared Ebola-free, holds lessons for others |
- U.S. stocks end higher despite drag from IBM