* FTSEurofirst 300 provisionally closes up 0.1 percent
* FTSEurofirst 300 ends 2012 up 12.9 percent
* Central bank action supports strong H2 for stocks
By David Brett
LONDON, Dec 31 European shares ended slightly
higher in the final truncated trading session of 2012, but
investors were unwilling to take on much risk given the U.S.
budget crisis and after strong year-to-date gains.
The FTSEurofirst 300 was up 1.21 points at
1,131.77, while the euro zone blue chip index inched
up 6.59 points to 2,633.44, according to provisional data.
With some European stock exchanges such as the French,
Dutch, Spanish and UK markets only trading for half the session
on Monday, and those in Germany, Italy, Austria, Denmark,
Norway, Sweden and Switzerland recorded light volumes.
Hopes were fading for any sort of broad fiscal deal in the
U.S. when Congress comes back on Monday, with only a few hours
of legislative time scheduled in which to act if an agreement
materialises to avert the tax hikes and spending cuts set to
come into force automatically in January.
But most of the few traders still at their desks had already
closed positions heading in to the year end, and financial
markets are largely anticipating that U.S. politicians will
compromise eventually, given the damage the automatic measures
would do to the U.S. economy.
"There are very few deals being done and there are few
sellers out there with most of us having flattened our positions
in the build up to Christmas," a London-based trader said.
"Emphasis is shifting from prevention towards retrospective
measures in the United States, but it will be interesting to see
how Wall Street reacts and what happens when traders get back to
their desk in the new-year," he said.
U.S. stock futures were notably up, although a failure to
find any common ground on the budget on Monday would rattle
BULLISH SECOND-HALF 2012
The Eurofirst 300 has just posted seven straight months of
gains for the first time since 1999.
Central banks' commitment to stabilising the financial
system and attempting to boost growth have favoured beaten down
equities. The main catalyst has been European Central Bank
president Mario Draghi's promise to do whatever it takes to save
With euro zone risks fading and investors becoming more
confident in stock picking, Europe equity funds continued to
enjoy inflows in the week that ended on Dec. 26, taking in fresh
money for a fifth week in a row and in 11 of the past 16 weeks,
EPFR Global data showed.
After suffering an 84 percent plunge between Oct 2009 and
June this year, Athens's benchmark index posted a gain of
32.5 percent for 2012, outpacing Germany's DAX, up 29.1