UPDATE 2-European shares tick lower, but defensive buying caps losses

* Volvo shares among best performers on STOXX 600
* Oil and gas stocks take support from oil prices
* Swedish cash handler Loomis worst performer on STOXX 600

(Adds comments, adds closing prices)
By Ambar Warrick and Medha Singh
LONDON, Dec 18 (Reuters) - European shares inched lower on
Wednesday on worries over a potentially hard Brexit, while
gains in defensive sectors capped losses.
Most regional bourses hovered around lows touched on
Tuesday, when UK Prime Minister Boris Johnson set a hard
deadline of December 2020 to reach a new trade deal over
Britain's exit from the European Union. While a resounding conservative election victory in Britain
and a de-escalation in Sino-U.S. trade tensions had spurred
stocks to record highs earlier this week, fears of a no-deal
Brexit saw investors adopting a more defensive stance.
"What we are trying to balance out here is the possibility
of a hard Brexit versus an extended version of a soft Brexit.
That is the question the markets are really asking themselves
right now," said Aneeka Gupta, associate director of research at
WisdomTree.
"The fact that Johnson wants to exit and there will be no
extension period, investors are now pricing in a no-deal Brexit
going back in the horizon."
The main STOXX 600 index .STOXX was 0.13% lower for the
day. The automobile makers' sub-index .SXAP served as the
worst performer, with Continental AG CONG.DE and Compagnie
Generale des Etablissements Michelin SCA MICP.PA leading
losses.
Domestically focused UK stocks .FTMC slightly extended
Tuesday's losses, which had been their worst day in more than
two months.
Swedish cash handling company Loomis LOOMb.ST was the
worst performer on the STOXX 600 after German competition
authorities prohibited the firm from acquiring German cash
handler Ziemann. German stocks .GDAXI dropped about 0.5%, despite a survey
showing that the country's business morale rose more than
expected in December to hit a six-month high. On the other hand, defensive sectors such as consumer goods
.SX3p led gains. Oil and gas stocks .SXEP were also higher
on strength in oil prices. O/R
Export-reliant blue-chip stocks in Britain .FTSE rose on
the back of a weaker pound GBP= , which has shed most of its
gains made since Johnson's election victory last week.
Shares in Volvo AB VOLVb.ST gained 3.6% after Japan's
Isuzu Motors 7202.T agreed to buy Volvo's UD Trucks business
and tie up with Volvo to cut costs and develop electric and
self-driving technologies. Volvo was one of the best performers on the STOXX 600.
Data showed that inflation in the Eurozone accelerated as
expected in November, thanks to a rise in food prices.