European shares dip on US budget standoff

   
European shares dipped in early trade on Friday, extending their two-week slide as investors worry the US budget deadlock could have negative implications on much more critical legislation to raise the US federal debt ceiling.    

At 0707 GMT, the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,241.57 points.    

The impasse between congressional Democrats and Republicans to pass an emergency funding bill, which has led to a third day of a partial US government shutdown, continued with little sign of progress toward a solution.    

The shutdown appeared likely to drag on for another week and possibly longer, with no end in sight until the next crisis hits Washington around Oct. 17, the date Congress must raise the nation's borrowing authority or risk default, and members of Congress now expect it to be the flashpoint for a bigger clash over the budget and Obama's healthcare law.    

The shutdown has delayed the closely-watched non-farm payrolls data, which had been due on Friday. The data is a key factor for the Federal Reserve to consider when deciding to scale back its stimulus.    

Shares in Deutsche Telekom bucked the trend, gaining 1.7 percent after UBS upgraded its recommendation on the stock to 'buy' from 'neutral'.      


REUTERS