head of European equity strategy at Morgan Stanley. While consensus forecasts have been for earnings growth of around 10 percent in Europe next year, Morgan Stanley is expecting just 4 percent. By the close of European markets the Dow Jones industrial average was flat at 10,928.1 points and the technology-laced Nasdaq Composite Index was down 0.7 percent at 2,247.5 points. U.S. stocks were lower as a dip in oil prices weighed on energy companies such as Exxon Mobil, and investors paused after a five-week rally. Interest rates are in focus for European markets as economists expect the European Central bank to hike rates on Thursday to 2.25 percent from 2.0 percent in the euro zone, the first increase in five years. Around Europe, London's FTSE 100 index lost 0.8 percent, having hit a a four-year high earlier in the session. Frankfurt's DAX shed 0.3 percent and Paris's CAC-40 gave up 0.5 percent and Zurich's SMI index fell 0.9 percent. Andrea Williams, head of European equities at Royal London Asset Management, said markets could still rise further and cited "strong earnings, confidence on the global economy and strong U.S. retail numbers over the (Thanksgiving) holiday period." "The markets' valuation is still pretty attractive relative to bonds," she said. Among standout gainers, Swiss chemicals maker Clariant rose 1.7 percent as talk resurfaced of a bid for the company by peer Ciba Specialty Chemicals, even though analysts and traders said such a move was unlikely.
