* FTSEurofirst 300 flat around midday
* Euro STOXX 50 up 0.1 pct to 2,656.59 points
* Tech stocks weaken after Ericsson makes writedown
* Traders looking to go into year-end with "flat" books
By Sudip Kar-Gupta
LONDON, Dec 20 (Reuters) - European equity indexes slipped
from multi-month highs on Thursday after fresh signs of friction
in U.S. budget talks, while a fall in mobile network maker
Ericsson also weighed on markets.
Many traders said they were looking for opportunities to
sell shares into any rally to lock in their profits before the
year-end, adding that some equity indexes looked "overbought" on
a technical basis and could be poised for small falls.
The pan-European FTSEurofirst 300 index, which
closed near a fresh 19-month high on Wednesday, was flat at
1,142.10 points by around midday.
The euro zone's blue-chip Euro STOXX 50 index
edged up 0.1 percent to 2,656.59 points, close to a peak of
2,661.25 points reached earlier this week which was its best
level since early August 2011.
Swedish group Ericsson was the worst performer on the
FTSEurofirst 300, dropping 3.2 percent and pushing the STOXX 600
European technology index down 0.7 percent after
announcing a fourth-quarter writedown.
"I've not really been keen on Ericsson for quite some time
now. The market's flooded now with new suppliers," said JN
Financial senior trader Rick Jones, who sold all his Ericsson
shares in April.
U.S. BUDGET UNCERTAINTY
U.S. politicians remain locked in talks to find a deal to
avoid a "fiscal cliff" of government spending cuts and tax rises
due to take effect in early 2013 that could hurt the world's
Although most investors expect a deal on the U.S. budget to
be struck eventually, signs of delays have opened the way to
fresh equity index falls, with moves often exacerbated since
volumes have been thin ahead of the Christmas holiday period.
Equity markets rallied in July after pledges from the
European Central Bank (ECB) to take new steps to fix the
region's sovereign debt crisis and weak economy, which led to a
bailout of Greece and a rescue deal for Spanish banks.
The FTSEurofirst 300 is up 14 percent since the start of
2012, while the Euro STOXX 50 has risen 15 percent.
Some traders said they were looking to sell to book profits
on those gains now since some European equity indexes appeared
"overbought" on a technical chart basis.
The Euro STOXX 50 had stepped into "overbought" territory on
its 14-day its Relative Strength Index (RSI) for the first time
since 2009, which meant some investors could be looking to lock
in some profits at this level.
Central Markets senior broker Joe Neighbour said there were
still some traders looking to use declines in the equity market
to buy stocks on the cheap ahead of a possible rally in January,
but on the whole investors were not taking on big positions.
"If there are profits to be had, we'll be looking to take
them off the table. The dip buyers still seem to be there to
look to take the market back up but we'll be looking to keep
flat as we go into the new year," he said.