European shares set for best December in a decade

* FTSEurofirst 300 set for best month of December since 1999

* Index down 0.1 pct on Christmas Eve on thin trade

* Randgold Resources falls 4.6 pct on Q4 output issue

By Dominic Lau

LONDON, Dec 24 (BestGrowthStock) – European shares dipped on Friday,
though they are set to post their best December performance in a
decade, while Portuguese stocks slipped after Fitch Ratings cut
the country’s credit rating.

Randgold Resources (RRS.L: ) shed 4.6 percent after the
West-African focused gold producer said fourth-quarter
production would be negatively hit by the impact of the
political tension in Ivory Coast on its Tongon mine and a
below-target contribution from its Loulo project in Mali.
By 1113 GMT, the FTSEurofirst 300 (.FTEU3: ) index of leading
European shares eased 0.1 percent to 1,145.17 points on
Christmas Eve, hovering near a 27-month intraday high hit on

The pan-European index is up 7.3 percent in December, on
track for its best monthly gains since July 2009 and best month
of December since 1999. It has risen 9.5 percent this year.

Equities have lately been buoyed by expectations of brighter
economic outlook in the United States after further stimulus and
continuing strength in China and India, while prospects of more
M&A deals also have provided support.
Fund tracker EPFR said investor focus has shifted from bonds
to equities in the final weeks of 2010, with equity funds
globally taking in a net $4.5 billion for the week ending Dec.
22. Bond funds saw redemptions totalling $2.3 billion.

“I am not on the same camp as many investment banks that
think we will have a fantastic 2011. We’ve got problems, we’ve
got sovereign debt issue. On the peripheries, there are still
issues that are outstanding that can clearly come back quite
easily,” said Jawaid Afsar, trader at Securequity.

“On top of that, you’ve got geopolitical risk in North
Korea. There is a lot of factors out there that can destabilise
the market.”
Many investors are concerned that the euro zone sovereign
debt crisis could be spread from Greece and Ireland to Portugal
and possibly Spain and Italy.

Fitch on Thursday cut Portugal’s rating by one notch to
A-plus, with a negative outlook. Still, the downgrade puts
Fitch’s rating two notches above that of Standard & Poor’s
A-minus. [ID:nN23149674]

Portugal’s share index (.PSI20: ) slipped 0.2 percent, with
Banco BPI (BBPI.LS: ) down 0.4 percent and Banco Espirito Santo
(BES.LS: ) off 0.9 percent. The Portuguese benchmark has lost more
than 7 percent this year.

Trading was thin, with only 4.4 and 5.8 percent of 90-day
daily average volume on Britain’s FTSE 100 (.FTSE: ) and France’s
CAC 40 (.FCHI: ), respectively. Many markets, including Germany,
Italy, Spain and Switzerland, were closed.

Across Europe, the FTSE 100 fell 0.2 percent in a shortened
session, though it was still set for its strongest run into the
festive period since 1987. The CAC 40 lost 0.4 percent.

Comments from China’s central bank that it will use various
policy tools, including interest rates, to help fight inflation
in 2011 had limited impact, as many markets were shut.

(Editing by Jane Merriman)

European shares set for best December in a decade