European shares slip as macro risks cap multi-month gains

LONDON Wed Jan 16, 2013 3:07am EST

LONDON Jan 16 (Reuters) - Europe's top shares opened lower on Wednesday with indexes consolidating around mutli-month highs and near technically "overbought" territory as sovereign risks remain a cloud on the horizon.

By 0800 GMT, the FTSEurofirst 300 was down 1.62 points, or 0.1 percent, at 1,158.60, lingering near 22-month highs but with the index flat-lining in the short-term term since hitting "overbought" territory just over a week ago.

The euro zone blue chip index has stalled too, around its own 18-month highs, awaiting catalysts to drive further a rally which has seen shares gain more than 30 percent since June.

With fiscal concerns continuing in the United States and with much of Europe still in recession, Mark Pignatelli, Smith & Williamson European Growth Trust fund manager, said an end to both of those issues in the coming months would be needed to drive the next leg of the equity rally.

"PMIs are still in recessionary territory but they are improving ... Over the next few months investors will look through the bottom of the trough and recognise that equities are perfectly solvent assets in a environment which is not growing fast but is ok," he said.

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