* FTSEurofirst 300 inches up 0.1 pct
* U.S. fiscal talks stall
* Carnival tumbles 6 pct on 2013 outlook
* William Hill announces Sportingbet purchase
By David Brett
LONDON, Dec 20 European shares stuttered on
Thursday as indexes approached overbought levels and budget
talks in the United States stalled, with cruise operator
Carnival plunging 6 percent on concerns about its earnings
The FTSEurofirst 300 closed 0.67 of a point higher
at 1,142.80, trading in a tight four-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 are
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.
Investor nervousness over the earnings outlook for companies
was reflected in a 6.1 percent drop in Carnival in heavy
trade after the cruise line operator said advance bookings for
2013 were behind the previous year.
Swedish group Ericsson dropped 1.8 percent after
announcing a fourth-quarter writedown.
Analysts expect company earnings in developed Europe to grow
by around 13 percent in 2013, according to Thomson Reuters
Starmine data, which F&C's Moss says looks too high, but he
remains constructive without being overly bullish on European
equities in 2013.
LOW VOLUME RALLY
That cautiousness has been reflected in trading volumes on
the FTSEurofirst and the euro zone blue chip index,
which are down more than 30 percent year-on-year so far in
But the low volumes and central bank pledges across the
globe to back stop their economies has helped the FTSEurofirst
300 to 19-month highs, while the STOXX50e has jumped nearly 10
percent since mid-November, reaching an 'overbought' level not
seen since 2006, charts show.
"There are no sellers out there. Asset managers want to
close the year with a big performance, and the hangover will
come in January. This has been an historical pattern: Christmas
rally, followed by technical correction, it's all in place,"
First Finance technical analyst Gilles Borrel said.
While Carnival fell on Thursday the travel and leisure
sector helped tip the FTSEurofirst into positive
territory, boosted by M&A activity.
William Hill and smaller partner GVC Holdings
announced in late trade that they had agreed a 485
million pound ($789 million) takeover of online gambling company
William Hill shares gained 1.7 percent, Sportingbet added
2.9 percent and peer Paddy Power rose 3.1 percent.
Weir climbed 2.8 percent after the British engineer
said it is to buy U.S. oil equipment firm Mathena as it looks to
increase its exposure to the rapidly growing shale oil and gas