European stocks fell slightly yesterday, hit by lower-than expected US consumer sentiment after earlier marking their strongest levels in 5-1/2 years on the back of merger talk in several sectors.

Trading volumes were thin ahead of yesterday's Thanksgiving holiday in the US.

The pan-European FTSEurofirst 300 index fell 0.16 per cent to 1,466.01 after earlier rising to 1,476.5, its strongest intra-day high since May 2001.

Around Europe, London's FTSE 100 shed 0.68 per cent, Paris's CAC-40 fell 0.13 per cent, while Frankfurt's DAX rose 0.24 per cent. Across the Atlantic, the Dow Jones Industrial average was almost flat by 1645 GMT.

Markets turned red after the University of Michigan's final reading of its November index of consumer sentiment fell to 92.1 per cent from October's 93.6, according to market participants.

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