* FTSEurofirst 300 up 0.01 pct, Euro STOXX 50 up 0.04 pct
* ThyssenKrupp rallies after activist investor raises stake
* Stocks on track to post best month of Sept since 1997
* Despite recent rally, earnings momentum remains negative
By Blaise Robinson
PARIS, Sept 25 European shares were mostly
steady around midday on Wednesday, with nagging concerns over a
potential U.S. government shutdown at the end of the month
keeping investors on edge.
German steelmaker ThyssenKrupp rallied 3.6
percent, featuring among the top raisers across Europe, after
activist investor Cevian raised its stake in the company to 5.2
percent and said it could buy more.
Nordic lender Nordea featured among the top losers,
sliding 3.1 percent after the Swedish government said it had
sold its remaining 7 percent stake in the bank for 76 Swedish
crowns per share, a 4 percent discount to Nordea's closing price
of 79.2 crowns on Tuesday.
At 1000 GMT, the FTSEurofirst 300 index of top
European shares was up 0.01 percent at 1,258.33 points. The
index has slipped about 1.3 percent since hitting a five-year
high last week.
The euro zone's blue-chip Euro STOXX 50 index
was up 0.04 percent, at 2,924.22 points.
Investors remained on edge as congressional authorisation
for the U.S. government to spend money runs out at the end of
the fiscal year on Sept. 30, and a small number of Tea
Party-backed U.S. senators have been threatening to stall a bill
to renew the funding.
The market has also been fretting about next month's
negotiations in Washington to raise the federal debt ceiling to
prevent a default, as well as the outlook for the Federal
Reserve's stimulus measures after the Fed decided not to scale
back the measures last week.
"Investors are still confused about the Fed's monetary
policy, and now the focus is switching to negotiations between
Democrats and Republicans in Washington. After such a rally,
people are now very cautious," said Guillaume Dumans, co-head of
research firm 2Bremans.
The Fed's quantitative easing programme has been a major
factor behind the global equity market rally of the past year,
which has propelled European shares to a 12-month forward
price-to-earnings ratio of 13, a level not seen since October
2009, according to Thomson Reuters Datastream.
The broad STOXX Europe 600 is up about 5 percent so
far this month, on track to post its best monthly performance in
two years, and its best month of September since 1997.
The sharp rise in the valuation ratio, however, suggests
that the equity rally has been more about excess liquidity in
the financial markets than underlying company profit growth.
Data shows that analysts continue to steadily downgrade
earnings forecast for European companies, with the region's
earnings momentum - upgrades minus downgrades as a percentage of
total - currently at minus 2.9 percent.
Riccardo Designori, analyst at Brown Editore, in Milan, said
risks remain for stocks, but on a relative basis, the asset
class offer the most value when compared with fixed income.
"Despite the risk of seeing a pull-back in the short-term,
stocks are still the best place to be, and within equities,
European stocks offer the best upside potential," he said.
"There's been a recovery in confidence, industrial
production is picking up, and we're seeing strong investment
flows coming into Europe, especially from U.S. and Japanese