Published November 23, 2012
European stocks traded flat on Friday, pausing after reaching two week high in the previous session, as investors awaited news on a deal for debt-stricken Greece.
The FTSEurofirst 300 was flat at 1,103.91 by 1035 GMT, having oscillated around Thursday's closing level throughout the course of the morning.
Volume on the FTSEurofirst 300 stood at just 16 percent of its 90-day daily average, and is expected to remain relatively subdued on Friday given the half-day closure of U.S. markets post Thanksgiving.
"Markets always suffer from very low volumes at this time of year during the Thanksgiving holiday and very, very narrow trading ranges, and I wouldn't be surprised if the market just hovers around these levels for the remainder of the day," Angus Campbell, head of market analysis at Capital Spreads, said.
Not even robust German business sentiment figures managed to jolt the index significantly higher on Friday, although the market has seen strong gains in the run-up to the data release.
The FTSEurofirst 300 is on course to record its best week in about 10 months on optimism that a funding deal for Greece is getting closer.
The pan-European index climbed to a two-week high on Thursday and is up 3.4 percent so far this week in the aftermath of two weekly declines, set to record its best weekly performance since early February.
Equity investors were putting their bets on a likely deal for Greece on Monday when the country's international creditors hold more talks, and that negotiations to avert the U.S. 'fiscal cliff' of spending cuts and tax rises will prove successful.
A senior Greek government official said on Friday that Greece's international lenders have agreed on new measures to cut its debt pile further but it still has to fill a 10 billion euros gap to gain the IMF's approval.
"I think sentiment has become a little bit too negative in the short-run as probably there will be some kind of deal for the U.S. fiscal cliff... and we see possibly that we are moving towards a deal for Greece," Gerhard Schwarz, head of equity strategy at Baader Bank, said.
"From a seasonal perspective December and January have been quite decent months in the past, so I would not be too surprised if we see a good development in equities over the next couple of weeks."
The FTSEurofirst 300 has notched up a monthly gain in December 12 times in the last 15 years.
In a day otherwise light in terms of corporate newsflow, EADS fell 2.3 percent to near the bottom of the FTSEurofirst 300 on a German newspaper report saying Germany plans to buy a 3 percent stake in the Airbus parent from France.
That means Germany will acquire only 1.5 percent of EADS shares from Daimler, fewer than expected.
"Daimler would then have to sell shares on the market. That is weighing on the share price because that would be a big package," a trader said.