* FTSEurofirst 300 down 0.2 percent after six days of gains
* Mining shares among top fallers; sector index down 1 pct
* Focus on U.S. Federal Reserve's policy meeting
* For up-to-the minute market news, click on [STXNEWS/EU]
By Atul Prakash
LONDON, Dec 14 (Reuters) - European shares edged lower on Tuesday as investors paused for breath ahead of a U.S. Federal Reserve policy meeting, though sentiment remained positive and more gains were seen likely after 26-month highs a day earlier.
At 1221 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.2 percent at 1,126.84 points, after rising for a sixth session on Monday -- the longest winning run in five months.
The benchmark index is up 7.8 percent this year, after a 26 percent jump in 2009.
Miners featured among the top fallers, as investors took
profits after the STOXX Europe 600 basic resources index <.SXPP>
rose more than 11 percent in the past two weeks. The index was
down 1 percent, BHP Billiton
Market participants are cautious as the year draws to a close, with volumes on the FTSEurofirst 300 staying just 9 percent of its 90-day daily average by midday.
"Volumes are quite low, which is possibly causing some concern," said Graham Bishop, equity strategist at RBS.
"But we still retain our bullish view for the course of next year as valuations are still very attractive, you are going to see earnings growth surprise on the upside and you have got massive monetary stimulus still."
Investors waited for the last scheduled meeting of Fed policy-makers in 2010 later in the day that follows a dramatic rise in yields on Treasury bonds. The central bank is expected to stay in a holding pattern and is unlikely to show any signs of scaling back its monetary stimulus. [ID:nFEDAHEAD]
"My expectations are nothing big to be announced. They will show support for the QE2, but I can't imagine that they will extend, be more dovish or will be more hawkish. This is the last meeting of the year and they are just going to play safe."
TECHNICAL OUTLOOK
Charts showed that the market had moved towards an "overbought" territory and that some pull back was on the cards. The FTSEurofirst 300's relative strength index (RSI) was at 63, not far from 70 and above, which is considered overbought.
But medium-term, the technical outlook was positive as equities stayed in their broad uptrend channel and hovered above their 50-day and 200-day moving averages and a 61.8 percent Fibonacci retracement of a fall from April to May.
Investors will keep an eye on macroeconomic numbers, with U.S. November retail sales figures due at 1330 GMT, November producer prices data also at 1330 GMT and October business inventories numbers at 1500 GMT.
Among individual stocks, Whitbread
TUI AG
Across Europe, Britain's FTSE 100 <.FTSE> index was up 0.1 percent, while both Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> were down 0.1 percent.
"There has been a little bit of a pull back in the markets. Investors are cautious ahead of the Fed," Philip Isherwood, European equities strategist at Evolution Securities, said. (Additional reporting by Joanne Frearson)