* FTSEurofirst 300 down 0.04 pct, Euro STOXX 50 down 0.1 pct
* FTSEurofirst at highest 'overbought' level in 3 years
* SocGen analysts see strong payrolls sparking rally
By Blaise Robinson
PARIS, Jan 4 (Reuters) - European shares inched down on
Friday as signs of rising concerns among U.S. Federal Reserve
members about the central bank's quantitative easing programme
prompted investors to book a portion of recent strong gains.
Investors were also cautious ahead of U.S. non-farm payrolls
data for December, due later in the session, despite Thursday's
forecast-beating jobs data for the private sector.
At 0906 GMT, the FTSEurofirst 300 index of top
European shares was down 0.04 percent at 1,162.15 points,
retreating from near-two-year highs hit in the previous session,
while the euro zone's blue chip Euro STOXX 50 index
was down 0.1 percent, at 2,698.16 points.
"The market is getting quite 'overbought', both U.S. and
European stocks, and there's a risk of a sell-off if the
payrolls figures are disappointing," FXCM analyst Nicolas Cheron
"A lot of fund managers are being sucked in, buying the
market because of fears of missing the rally. We're set for a
correction wave sometime in the next two to three months. It
might not start in the short term, but it's definitely coming."
The FTSEurofirst 300 hit its most "overbought" level in
three years this week, with its 14-day relative strength index
(RSI) rising to 72.4, a signal that the market is ripe for a
pull-back in the short term.
Minutes from the Fed's December policy meeting released on
Thursday showed some voting members of the Federal Open Market
Committee were increasingly worried about the potential risks of
the Fed's asset purchases on financial markets.
U.S. non-farm payrolls data, due at 1330 GMT on Friday, is
expected to show employers added 150,000 jobs last month.
On Thursday, the ADP National Employment Report showed the
private sector added 215,000 jobs last month, beating economist
forecasts, but FXCM's Cheron warned it doesn't necessarily means
that Friday's broader payrolls data will also be
"Despite common belief, the correlation between ADP figures
and payrolls data has been pretty low historically," he said.
Analysts at Societe Generale, however, are more bullish,
betting on the creation of 225,000 jobs last month, well above
"Labour market conditions probably improved substantially in
the final month of 2012 ... we expect risky assets to rally
intraday due to the positive surprise element," the analysts
wrote in a note.
Cyclical mining shares were the top losers on Friday, with
Randgold Resources down 2.9 percent and Lonmin
down 1.5 percent.
Big pharma stocks, seen as defensive plays, gained ground,
with GlaxoSmithKline up 0.4 percent, Novartis
up 0.4 percent and AstraZeneca up 0.2 percent.
Around Europe, UK's FTSE 100 index was down 0.1
percent, Germany's DAX index down 0.1 percent, and
France's CAC 40 down 0.2 percent.