LONDON: European stock markets recovered slightly on Monday after last week's heavy falls, while the euro hit a two-month low point against the dollar as traders focused on Spain's debt strains.
In late morning deals, London's benchmark FTSE 100 index climbed 0.48 percent to 5,678.71 points, Frankfurt's DAX 30 rose 0.38 percent to 6,607.92 points and in Paris the CAC 40 grew 0.54 percent to 3,205.92.
Madrid dipped 0.07 percent and Milan won 0.55 percent.
In foreign exchange trading, the euro struck a two-month low point of $1.2995 around 0635 GMT. It later stood at $1.3012, which compared with $1.3078 on Friday.
"While the shares are consolidating after the recent losing streak, the concerns that were dominating the scene are still gnawing at the performance of the markets," said Gekko Global Markets trader Anita Paluch.
Spanish government "bond yields are on the rise again, spurring the fears of the real condition of the eurozone crisis and cooling down the appetite for riskier assets."
The interest rate which Spain has to pay to borrow rose above 6.0 percent in early trading Monday on the eurozone bond market.
The yield on Spanish 10-year debt bonds climbed to 6.094 percent from 5.960 percent at the close of trading on Friday.
The rise in the rate indicated by yields on existing bonds reflects deep concern among investors about the ability of Spain to reduce its annual public deficit.
This has re-ignited tensions in the eurozone bond market, just days before a French presidential election in which the role of the bond market is a central issue.
A borrowing rate of more than 6.0 percent is widely considered to be close to a level that is unsustainable for a country such as Spain, as was the case for Greece, Ireland and Portugal which had to be rescued by the European Union and International Monetary Fund.
Asian stock markets earlier closed lower on Monday as Spain's debt troubles added to already downbeat sentiment caused by weak Chinese growth data and fading optimism over the US economy.
Tokyo fell 1.74 percent, Seoul shed 0.81 percent and Sydney lost 0.49 percent.
Wall Street had slumped on Friday after data showed Spanish banks borrowed a record 227.6 billion euros in emergency cheap loans from the European Central Bank in March.
The figures show the weak confidence in the country's financial sector, with commercial banks turning to the ECB because they are struggling to borrow on the interbank market.
Spain and Italy have come under scrutiny in recent weeks amid fears they could be the next economies to succumb to the same fate as Greece, Ireland and Portugal and need a bailout.
The yield on Spanish 10-year bonds jumped to 5.956 percent on Friday from 5.802 percent on Thursday, while the yield on Italian 10-year bonds rose to 5.513 percent from 5.394 percent.
Meanwhile optimism over the US economy -- which was driven by several months of strong jobs growth -- has waned in recent weeks and a bigger-than-expected drop in the University of Michigan's consumer sentiment index added to anxieties Friday.
Figures also showed the number of people claiming unemployment benefit rose for a second straight week.
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