PARIS, Dec 12 (Reuters) - European shares steadied in early
trade on Monday, keeping alive their sharp three-week rally as
investors bet the U.S. Federal Reserve will unveil a new round
of bond buying in a bid to support the economy.
At 0804 GMT, the FTSEurofirst 300 index of top
European shares was up 0.02 percent at 1,139.11 points, after
hitting an 18-month high on Tuesday.
UK's FTSE 100 index was up 0.05 percent, Germany's
DAX index up 0.2 percent, and France's CAC 40
The Fed is expected to replace its so-called Operation
Twist, a programme of Treasury purchases which is drawing to a
close, with a new bond buying plan which will further expand the
central bank's balance sheet.
A number of traders, however, warned that stocks were poised
for a retreat, after the FTSEurofirst 300 surged about 7 percent
in three weeks.
"The market is getting 'overbought', which doesn't happen
very often. We're ripe for at least a pause, and maybe a
pull-back," said Patrice Perois, trader at Kepler Capital
Markets, in Paris.
"Volumes have been extremely low, which means that the rally
remains fragile regardless of the newsflow."