Europe stocks steady, euro slips

European shares steadied on Monday but the euro remained under pressure as investors digested news that Standard & Poor's cut the rating of nine European nations, including France's triple-A status. In early trade, London's benchmark FTSE 100 index of leading shares slipped 0.05 percent to 5,632.47 points and the Paris CAC 40 shed 0.06 percent to 3,192.88 points but Frankfurt's DAX 30 rose 0.25 percent to 6,158.49 points. Milan's FTSE Mib index gained 0.46 percent to 15,083.90 points and Madrid's Ibex 35 edged down 0.03 percent to 8,447.70 points. In foreign exchange deals, the euro slipped to $1.2671 in morning London deals from $1.2677 late in New York on Friday, when it had plunged to $1.2624 -- a level last seen in August 2010. Standard & Poor's on Friday cut France's and Austria's top AAA rating by one notch to AA+ with a negative outlook, citing European leaers' inability to come up with a solid plan to tackle the two-year-old eurozone debt crisis. S&P also downgraded under-pressure Italy and Spain, which have already seen the interest on their bonds hit dangerously high levels. Overall nine countries had their ratings cut while seven had theirs affirmed, including European powerhouse Germany which alone was left untouched with its rating outlook stable. Greece was excluded. "The latest S&P decision to downgrade nine eurozone countries did not catch the markets by surprise as the agency placed (the eurozone) ... on watch" some weeks back, said trader Anita Paluch at Gekko Global Markets. The move means that France will now have to pay more to borrow on international money markets, which could raise the cost of borrowing for businesses and households and dampen already faltering economic growth. "After weeks of prevarication and lots of rumours, Standard and Poor's finally put markets out of their misery on Friday and pulled the trigger on France's triple-A rating," said CMC Markets analyst Michael Hewson. He added: "A clutch of other downgrades, including Austria, Italy and Spain, further complicates European leaders' attempts to resolve the debt crisis." Friday's downgrades had been mostly expected but analysts said the move showed the eurozone debt crisis was worsening. S&P warned last month that it was putting the eurozone on review for downgrade while markets were abuzz with downgrade speculation in the run-up to Friday's announcement. Asian equities also fell on Monday as investors digested the S&P move. Sydney lost 1.16 percent, Tokyo fell 1.43 percent, while Seoul ended 0.88 percent lower and Hong Kong dropped 1.0 percent. The news brought the eurozone debt crisis back to the forefront with traders looking ahead to a crucial week in the region as Greece struggles to come to an agreement with private creditors over debt, raising fears it could default. Athens is holding discussions with private banks on writing down part of its debt, which is considered vital to avoid a messy default. However, talks Friday stalled, raising the prospect that Greece could plunge out of the eurozone with dire results for the region and the global economy. "The focus of attention now that the downgrade announcements have taken place will quickly shift to Greece where talks over private sector involvement broke down on Friday," said economist Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ in London. Prime Minister Lucas Papademos said Greece faced "acute economic dangers" without the writedown deal, which is intended to cut 100 billion euros ($127 billion) from Greece's massive debt burden and help unlock further international bailout aid.