Macro woes push European shares to 3-1/2 mth low

Last Updated: Sat, Nov 17, 2012 19:13 hrs

LONDON, Nov 16 (Reuters) - European shares sank to a three and a half month closing low on Friday and chalked up their worst week since late September, on persistent concerns over the U.S. fiscal policy outlook and the euro zone debt crisis.

The FTSEurofirst 300 provisionally ended down 1 percent at 1,068.34, its lowest close since Aug. 2, and taking its weekly loss to 2.6 percent.

"Investors are pretty cautious and uncertain; it's been a difficult week," Michael Hewson, senior markets analyst at CMC Markets, said.

"You've got a growing acceptance that there will be no quick resolution either in the U.S. or in Europe and... what people are starting to do is take a bit of money off the table for the year, because further upside is likely to be very limited."

Investors were again focused on the potential economic impact of U.S. spending cuts and tax hikes due to kick-in in early 2013, as President Barack Obama and congressional leaders readied for budget and tax talks on Friday.

Uncertainty over the next steps with regard to Greece's finances also weighed on sentiment, with banking shares in the euro zone the worst hit, down 2.6 percent and giving back yet more of their recent three month rally.

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