UPDATE 1-European shares falter as year-end rally fades

(No European stock market report on Jan. 1 due to a UK/EU
holiday)
* Investors book profits after record-setting December rally
* Caution sets in about trade progress in 2020 - analysts
* Benchmark European index clocks best year since 2009
* France's Latecoere gains on deal to buy Bombardier unit

(Adds details, updates prices)
By Sagarika Jaisinghani
Dec 31 (Reuters) - European shares ended the final trading
day of the decade with a whimper on Tuesday as investors locked
in gains after a record rally fuelled by optimism around trade
and easing fears of a global recession.
In a shortened session ahead of the New Year's Eve
celebrations, the pan-European STOXX 600 index .STOXX closed
down 0.1%.
French .FCHI , British .FTSE and Spanish .IBEX stocks
lost between 0.1% and 0.7%, while Frankfurt .GDAXI and Milan
.FTMIB bourses were shut for the year-end holidays.
Still, the benchmark index clocked its biggest annual gain
since the global financial crisis as investor sentiment received
a boost in December from a breakthrough in U.S.-China trade
negotiations and signs of a smoother Brexit.
White House trade adviser Peter Navarro said on Monday a
Phase 1 trade deal was likely to be signed in the next week.

Relatively loose monetary policy by the world's most
influential central banks and robust economic indicators have
also lifted global equities to record highs this month.
MKTS/GLOB
Data from China showed manufacturing activity expanded for a
second straight month in December, partly on higher seasonal
demand. But with the finer details of the initial China-U.S. trade
agreement not yet known, analysts said investors used the last
trading day of the year to reposition for 2020.
"While market volumes are predictably light, investors
continue to strike a year-end cautionary tone as December
optimism is gradually giving way to 2020's uncertainty," Stephen
Innes, a market strategist at AxiTrader, wrote in a note.
For European traders, Brexit clouds are gathering again.
Although Britain's exit from the European Union is now
almost certain on Jan. 31, Prime Minister Boris Johnson's hard
line on the country's future trade relationship with the bloc
has again fanned fears of a no-deal Brexit.
Investors will also be looking at Germany for concrete signs
of economic growth, after Europe's powerhouse teetered on the
brink of recession this year.
Despite equities in the country being highly sensitive to
trade progress, German shares rose only 0.1% in December, widely
underperforming their regional peers.
For the year, the STOXX 600 rose about 23%, but lagged both
the wider MSCI world index .MIWD00000PUS and the benchmark S&P
500 .SPX .
In thin corporate news on the final trading day of the year,
French aeronautics group Latecoere LAEP.PA gained 2% after
agreeing to buy Bombardier's BBDb.TO electrical wiring
interconnection system business for around $50 million.