LONDON: European stocks eased on Wednesday, failing to hold the previous day's gains as anti-austerity strikes across southern Europe and Greece's unresolved debt crisis put the euro zone's troubles back in focus. Strikes in Spain and Portugal shut schools and grounded flights across the Iberian peninsula, while international lenders continued to disagree over how long to give Greece to get its debts down to a sustainable level. Banks, the most directly exposed to swings in the euro zone crisis due to their sovereign debt holdings, were the worst performing sector in Europe, down 0.7 percent. The FTSEurofirst 300 was down 0.3 per cent at 1,096.03 points by 0848 GMT, eating away at Tuesday's 0.4 per cent rise which was its first daily gain in a week. The market was also weighed down by concerns about the US 'fiscal cliff' of some $600 billion in planned tax hikes and spending cuts which threaten to plunge the world's biggest economy back into recession next year. "The failure to sustain any momentum ...suggests there is a buyers' strike and they are staying on the sidelines, waiting for a resolution either in Greece or in the US," said Ioan Smith, strategist at Knight Capital. The euro zone crisis has taken its toll on third quarter company profits in the region, with German utility E.ON extending losses a day after warning of weaker power demand in the region unleashed a string of ratings and target price cuts. Other fallers included oil major Shell and Irish budget airline Ryanair which on Wednesday traded ex-dividend, meaning new investors will no longer qualify for the latest payout. But strong demand from North American helped lift sales at Electrolux, boosting shares 2.6 per cent. The technical picture on Europe's main indexes remained inconclusive, with no clear end in sight to more than two months of narrow range-trading. The EuroSTOXX 50 benchmark of euro zone blue chips eased 0.2 per cent to 2,488.94, but held above the bottom of the 2,440 to 2,570 range which it tried but failed to probe on Tuesday. "We've hit the bottom of the range so we know we are going to test at least the middle of the range and possibly even the higher threshold. It's slightly more bullish than bearish because we are bouncing off the support," said Valerie Gastaldy at technical analysis firm Day By Day. "To escape from the range... we need money to flow from bonds to equities and as long as I don't have that signal from bond market I can't be sure that we are going to really break above 2012 highs."

Source