Europe shares pare gains after EU growth forecast

PARIS Wed Nov 7, 2012 12:40pm GMT

PARIS Nov 7 (Reuters) - European stocks pared early gains and briefly turned flat around midday on Wednesday, as nagging worries over the euro zone crisis eclipsed an initial relief from U.S. President Obama's re-election.

At 1233 GMT, the FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,115.52 points after surging to less than a point from a 16-month high in early trade.

The European Commission said on Wednesday the euro zone economy will barely grow next year, with Spain's economy expected to contract by 1.4 percent this year and by the same pace next year, much worse than the government's prediction.

"It's been those revised euro growth forecasts, general cuts in expectations for growth. That has provided the catalyst, or excuse if you like, for people to cut back a bit, but we would've expected some weakness after last night's run higher anyway," a London-based trader said.