LONDON, Dec 7 (Reuters) - European shares traded
fractionally higher early on Friday, consolidating 18-month
highs, as a worsening economic outlook for Europe tempered some
optimism about U.S. budget negotiations.
Sentiment was underpinned by signs the White House and
Republicans had resumed private talks on delaying a January
"fiscal cliff" of scheduled tax rises and spending cuts, which
could stall the world's largest economy.
The FTSEurofirst 300 index of top European shares
traded 0.2 percent higher at 1,133.95 points, extending a 7
percent rally since mid-November on expectations the fiscal
cliff will be avoided.
But Germany's Dax was up just 0.1 percent after the
Bundesbank cut its growth outlook for Europe's largest economy
next year on Friday as the euro zone debt crisis takes its toll
on the bloc's largest economy.
"If you want to capture the year end rally you'll have to be
long," Justin Haque, a broker at Hobart Capital Markets, said,
adding that markets could take a turn for the worse in 2013.
"You cannot stand in the way of the numbers, which tell us
Europe will be in a recession next year and earnings will be
poor," he said.