European shares fall as U.S. 'cliff' looms

Last Updated: Mon, Dec 31, 2012 08:10 hrs

LONDON, Dec 31 (Reuters) - European stocks fell in the last session of the year on Monday as an impasse in U.S. budget talks pushed the world's biggest economy to the edge of the "fiscal cliff" of austerity measures that would curb global growth.

The U.S. Senate was due to meet at 1600 GMT to continue discussion over averting the steep tax increases and spending cuts due to kick in the new year, but there were still significant differences between the two sides.

Trading will be muted on Monday as a number of European stocks exchanges such as the French, Dutch, Spanish and UK markets will only trade for half the session, while those in Germany, Italy, Austria, Denmark, Norway, Sweden and Switzerland will be closed.

The pan-European FTSEurofirst 300 index was down 0.1 percent at 1,129.58 points, while France's CAC was down 0.1 percent to 3,615.94 points and Britain's FTSE shed 0.2 percent to 5,909.62 points at 0803 GMT.

"Volumes are very depressed and we're going to see a lot of cash off the table and investors are probably going to take profit on cyclical shares," Ishaq Siddiqi, a market strategist at ETX Capital, said.

Siddiqi added a failure to avert the "fiscal cliff" may push the FTSE back to a late November low of 5,800 in the coming sessions.

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