Europe shares slip on fresh U.S. fiscal cliff worries

LONDON Wed Nov 28, 2012 8:09am GMT

LONDON Nov 28 (Reuters) - European shares edged lower on Wednesday as fresh worries over the U.S. economy's "fiscal cliff", a combination of looming spending cuts and tax hikes, impacted the region's stock markets.

The pan-European FTSEurofirst 300 index, which rose 4 percent last week, slipped 0.2 percent to 1,104.78 points in early trade. The euro zone's blue-chip Euro STOXX 50 index fell 0.3 percent to 2,535.69 points.

Banking group Raiffeisen was the worst-performing stock on the FTSEurofirst 300, falling 5 percent after the company said it expected bad loans to rise.

U.S. Senate Majority Leader Harry Reid said on Tuesday he was disappointed there had been "little progress" among Democrat and Republican lawmakers as they try to reach a deal to avoid the year-end "fiscal cliff".

The "fiscal cliff" refers to $600 million in spending cuts and tax hikes, which could derail the U.S. economic recovery.

"It's just that one comment that is causing a slight storm in the tea cup. I think it's still a pretty resilient market out there, I don't see Europe following the U.S. by falling too far down," said McLaren Securities managing director Terry Torrison.