* FTSEurofirst 300 falls 0.1 pct to 1,132.52 points
* Euro STOXX 50 declines 0.1 pct to 2,628.01 points
* KPN hits telecoms sector, Aggreko also weighs
* Investors unwilling to take new positions before year-end
By Sudip Kar-Gupta
LONDON, Dec 17 European shares fell on Monday,
hit by slumps in telecoms group KPN and power company
Aggreko, as investors cashed in some equity holdings at
the start of the final, full trading week of 2012.
The pan-European FTSEurofirst 300 index closed down
0.1 percent at 1,132.52 points, while the euro zone's blue-chip
Euro STOXX 50 index also fell 0.1 percent to
A 15 percent slump at KPN - after the Dutch firm cut its
dividend - hit European markets. KPN's fall dragged down rival
Vodafone which lost 1.7 percent to take the most points
off the FTSEurofirst 300 index.
British power generator provider Aggreko also weighed on the
FTSEurofirst 300 after dropping 21.7 percent as it issued its
second profit warning in two months.
European shares fell in spite of early gains by U.S. stock
markets which reacted positively to some signs of progress over
a deal to avoid the U.S. "fiscal cliff" - some $600 billion of
tax hikes and spending cuts due in January, which could push the
U.S. economy into recession.
Darren Easton, director of trading at Logic Investments,
said he had bought some Vodafone stock following its decline,
but would generally look to sell shares before the year-end due
to uncertainty over the fiscal cliff talks.
"I've been selling since the last three or four days,
believing that we won't be able to stay at these highs without
some deal being done on the fiscal cliff," said Easton.
"The closer we get to the end of the week, the more nervous
people will get and the more likely they will be to sell the
market," he added.
UNWILLINGNESS TO TAKE NEW POSITIONS
The FTSEurofirst 300 had risen for eight consecutive
sessions at the start of December, pushing it to an 18-month
intraday high of 1,141.32 points, before then slipping back for
three straight sessions.
XBZ European equity options broker Mike Turner said some
technical traders felt European stock markets were looking
"overbought", and were therefore due for a slight sell-off.
The Euro STOXX 50 index was hovering just below a relative
strength index (RSI) point of 70 points. Technical analysts view
an index whose RSI is over 70 as in 'overbought' territory,
while an RSI under 30 is in 'undersold' territory.
"It's tending towards the 'overbought' territory," said
Nevertheless, most European stock markets are due to end
2012 in positive territory, after pledges by the European
Central Bank in July for fresh measures to tackle the region's
sovereign debt crisis lifted equity markets from year lows.
The FTSEurofirst 300 and Euro STOXX 50 have risen 13 percent
since the start of 2012. France's CAC-40 has gained 15
percent while Germany's DAX has risen nearly 30
Hartmann Capital trader Basil Petrides said most investors
would look to cash in on gains made by European equities over
the course of the year before the end of 2012, rather than take
large, new positions before January.
"We'll go into a very quiet week. Most people will not want
to open new positions over the Christmas holidays," he said.