European shares drift higher, Greek news awaited

Wed Nov 21, 2012 6:53pm IST

* FTSEurofirst 300 up 0.1 percent

* Cautious outlook hits Johnson Matthey

* Staffing firms knocked by Randstad warning

* British Land helped by Morgan Stanley upgrade

By Tricia Wright

LONDON, Nov 21 (Reuters) - European shares edged up on Wednesday in choppy trade as investors watched for any signs of progress on a delayed deal to unlock aid to keep Greece solvent.

Greece's international lenders will meet again on Monday after talks through the night failed to achieve a consensus on how to get the country's debt down to a sustainable level.

Following the meeting, German Chancellor Angela Merkel told lawmakers at a closed-door meeting that lower interest rates and an expanded European Financial Stability Fund could fill Greece's financing gap, a source at the session told Reuters.

The FTSEurofirst 300 was up 0.1 percent at 1,095.39 by 1253 GMT, having oscillated around Tuesday's closing level throughout the morning, with trading volume at a meagre 30 percent of its 90-day daily average ahead of a U.S. public holiday for Thanksgiving on Thursday.

The euro zone's blue chip Euro STOXX 50, meanwhile, was flat at 2,510.69. Charts pointed to further lacklustre trade for the index, which has been stuck in a near 200-point range since early September.

Philippe Delabarre, technical analyst at Trading Central, said the Euro STOXX 50 is in consolidation mode, capped by the 50-day moving average at 2,511 points - which is turning down - and a declining trend line drawn from September's and November's tops at around 2,550 points.

Gains were kept in check by concern over the U.S. 'fiscal cliff' of some $600 billion in contractionary spending cuts and tax rises after Federal Reserve Chairman Ben Bernanke said the central bank lacks tools to cushion the U.S. economy from it.

"The market is trading within a pretty tight range as we wait for greater details of the financial aid package to be confirmed for Greece," Henk Potts, market strategist at Barclays, said.

"Against a backdrop of the shortened week in the United States you'd expect markets to remain reasonably nervous given the fact that many of the big macro issues are still lingering including the risk of the fiscal cliff."

BROKER BOOST

Among big movers on Wednesday, British Land advanced 1.9 percent with traders citing an upgrade to "overweight" from "equal weight" by Morgan Stanley, the day after the real estate investment trust's first-half results.

The upgrade for British Land also helped peer Land Securities to rise 1.2 percent.

Johnson Matthey, meanwhile, topped the list of FTSEurofirst 300 fallers, off 6.3 percent in brisk trade, after the British specialty chemicals firm issued a cautious outlook, dented by weakness in Europe and a volatile U.S. truck market.

Trading volume in Johnson Matthey stood at one and a half times its 90-day daily average.

Other corporate earnings newsflow further underscored the problems facing the euro zone, with data released last week showing the region is already back in recession.

Randstad dropped 5.2 percent after the Dutch staffing company warned of a continued drop in sales, especially in Europe, and changed its dividend policy, prompting analysts to expect a dividend cut.

Its trading volume was 125 percent of its 90-day daily average.

The news had a negative knock-on effect on its peers, with Adecco and Michael Page off 1.7 percent and 1.3 percent respectively.

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