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Europe: Shares drift into year-end as resources stocks glitter

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[LONDON] European shares inched lower on Thursday with company news and macro events scarce in holiday-thinned trading, while Britain's FTSE 100 hovered just under a record high.

The pan-European Stoxx 600 index fell 0.3 per cent, while euro zone blue chips slipped 0.7 per cent.

A rally in commodity prices continued to support the resources-heavy FTSE 100 index, which ended flat.

Europe's basic resources index was the best-performing sector, up 0.4 per cent at its highest level in nearly 5 years.

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Tech stocks extended the previous session's losses, when chipmakers were hit by concerns over demand for Apple's iPhone X. Shares in Dialog Semiconductor rebounded on Thursday, however.

The tech sector fell 0.8 per cent on the day, but has gained more than 19 per cent so far this year, the standout performer in Europe.

More broadly, volumes have been muted and liquidity in short supply over the festive season in Europe, with little by way of company news to spur significant moves among single stocks.

Shares in BT fell 2.5 per cent after the telecoms stock traded ex-dividend, while volatile Steinhoff was among the top gainers, up 3 per cent.

Italian bank Banco BPM rose 2 per cent after saying it had capital in excess of requirements set by the European Central Bank.

Serviced office provider IWG fell 1.3 per cent. The stock rose 27 per cent in the previous session when it confirmed a bid approach from a Canadian private equity firm.

Nearing the year-end, European stocks have enjoyed a positive year, with the Stoxx 600 up around 8 per cent in 2017 as buoyant company earnings and a brighter economic backdrop have fuelled the region's equities.

Analysts also highlighted broader drivers of equity markets over the year.

"I think predominantly US sentiment and tax reforms have really driven (stock markets), as well as central banks starting to get a lot more hawkish - the ECB joining the US in some quantitative tightening, the opposite of the easing that we've had for years and years," Henry Croft, research analyst at Accendo Markets, said.

Germany's DAX and Italy's benchmark are among this year's winners, up 13.1 per cent and 15.4 per cent respectively, while Britain's FTSE has managed to gain 6.7 per cent.

REUTERS