European shares steady, RBS drops

Wed Dec 11, 2013 4:21am EST

* FTSEurofirst 300 up 0.1 percent

* RBS drops after finance chief leaves to join Santander

* Charts bearish for Euro STOXX 50; 2,953 seen as support

By Tricia Wright

LONDON, Dec 11 (Reuters) - European shares steadied on Wednesday after falling in the previous session, with RBS a big loser on the departure of its finance chief, as uncertainty over the outlook for U.S. monetary policy looked set to cap any broader gains.

Royal Bank of Scotland fell 1.7 percent, the biggest faller on the FTSEurofirst 300, after the bank said Nathan Bostock had resigned to join Spanish bank Santander after just 10 weeks in the job.

Bostock's departure deals another blow to turnaround efforts at the British lender, which is 81 percent owned by the government. Stephen Hester stepped down as RBS chief executive earlier this year.

"The fact that another member of the management team has decided to jump ship is unlikely to improve sentiment towards the stock," Richard Hunter, head of equities at Hargreaves Lansdown, said.

The FTSEurofirst was up 0.1 percent at 1,263.98 by 0853 GMT, having dropped 0.7 percent on Tuesday. The index is some 4 percent below a five-year high of 1,316 hit in early November. The euro zone's blue-chip Euro STOXX 50 index , was up 0.2 percent at 2,966.67 points.

Shares have been drifting lower on uncertainty over when the U.S. Federal Reserve will start scaling back its monetary stimulus, with recent robust U.S. data having re-ignited speculation it could start the process before year-end.

News that U.S. budget negotiators had reached a provisional two-year deal to avoid another government shutdown offered some reassurance about the U.S. economy but was also seen as providing more room for the Fed to dial back its stimulus scheme earlier.

"Now we've got that (the budget deal) out of the way, then there's the risk that the tapering is going to come a little bit sooner. But in my mind not December," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

"In a way it's not that important whether it's going to be January or February or March... it will come and that will be a rough period (for) the market... We are still quite positive for 2014 but it will not (go up in) a straight line."

Charts, however, painted a gloomy near-term picture, with the Euro STOXX 50 having dropped some 4 percent in December, taking it below its 50-day moving average.

"The technical picture for the STOXX has deteriorated significantly over recent sessions... and I'm not sure that we've seen the bottom," Bill McNamara, analyst at Charles Stanley, said.

"Last week's closing low, at 2,953, is now the key level and if that gives way I think we could see a retreat back to 2,900."

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