* FTSEurofirst 300 down 0.3 percent
* Aggreko drops 16 pct, cautions on 2013 outlook
* KPN shares plunge after dividend cut
By Tricia Wright
LONDON, Dec 17 European shares fell at the start
of what is likely to be a volatile week on Monday given
uncertainty over U.S. budget talks.
Temporary power provider Aggreko was the top faller
after its latest update.
The FTSEurofirst 300 was down 0.3 percent at
1,129.93 by 0946 GMT, having dipped 0.1 percent in the previous
session. Trading volumes stood at 18 percent of the 90-day daily
Many in the market believe a deal on the U.S. budget will be
struck, but any news to the contrary could open the way to fresh
index falls, especially as traded volumes remain thin.
"We're a bit jittery here that there's not going to be
significant progress... Ultimately I think we will get a deal,
but all the risk is on the downside," Joe Rundle, head of
trading at ETX Capital, said.
"Every day we tick on now people are going to get a bit more
jumpy... I don't think there will be a full-on deal by the 31st
of December... but I think if we're poles apart there's going to
be a real issue (and the market) will come off really
Automatic spending cuts and tax hikes are due to kick in,
potentially damaging the U.S. economy, at the end of the year
unless an agreement is reached to avoid them.
Rundle reckons the FTSEurofirst 300 could come off as much
as 7 percent in the event of disappointment.
Aggreko topped the index's fallers' list, slumping
more than 16 percent after it warned on the outlook for its
business in a trading update, prompting Investec Securities to
cut its rating on the stock to "hold" from "buy".
"Today's news will be seen as a something of a setback...
That said, we continue to believe that there are many structural
drivers that should continue to drive earnings in the years to
come," Investec said in a note.
Telecoms group KPN slid 13 percent, leading falls
seen across the sector, after the Dutch state raised much more
than expected in its auction of fourth generation (4G) wireless
frequencies, with prices so high KPN cut its dividend for this
year and next to afford its licences.
Vodafone was another significant faller, off 2.3