European stocks slide with focus back on eurozone

European stock markets were mostly softer on Monday and the euro fell back against the dollar as markets focused on the eurozone after the ECB termed a report on mooted bond purchases "misleading." In afternoon trading, London's FTSE 100 index had fallen by 0.47 percent to 5,824.85 points compared with Friday's closing levels. Frankfurt's DAX 30 index was down 0.16 percent to 7,029.39 points, while the Paris CAC 40 was off by 0.69 percent to 3,464.29 points. Milan gave up 1.48 percent and Madrid fell 1.66 percent. In foreign exchange transactions, the euro fell to $1.2306 from $1.2330 late on Friday in New York. "European markets opened cautiously this morning as investors were tentative due to comments by the European Central Bank (ECB) that they would intervene to cap borrowing costs for Spain and Italy," said Spreadex trader Shavaz Dhalla. German newsweekly Der Spiegel reported Sunday that the ECB was considering buying bonds issued by heavily-indebted eurozone countries in a move that would ensure borrowing costs did not rise beyond a pre-determined level. An ECB spokesman dismissed the report as "absolutely misleading" however, while another at the German finance ministry said such an action would be "be very problematic." Borrowing costs for Spain and Italy have shot up towards levels that forced Greece, Portugal and Ireland to seek a bailout, though the rate on Spanish 10-year bonds fell in midday trading on Monday. The interest rate, or yield on its 10-year bonds stood at 6.296 percent on the secondary market, down from from 6.443 percent at the close on Friday. In the United States, US stock trading opened with modest losses in a quiet market. The Dow Jones Industrial Average was down 0.17 percent at 13,252.09 points in the first five minutes of trade. The S&P 500-stock index dipped 0.13 percent to 1,416.27 points, while the tech-rich Nasdaq slipped 0.14 percent to 3,072.36 points. Back in Europe, "Greece is also back on the agenda today," said Dhalla. "Headline reports over the weekend have indicated that German policy makers have insisted there is no room for negotiation over Greece's current austerity measures. "Thus, it seems today investors will ponder the possibility of Greece leaving the euro, again, because of excessive austerity measures imposed by eurozone officials as well as the potential that private funding to eurozone nations could dry up," he added. A Greek exit from the eurozone would be "manageable" but also expensive and result in higher unemployment, a top member of the ECB governing council was quoted as saying on Monday. In an interview with the daily Frankfurter Rundschau, Joerg Asmussen, a German member of the ECB's Executive Board, was asked about the possibility of debt-wracked Greece being forced out of the eurozone. "First: My preference is clear. Greece should stay in the eurozone. Second: It is in Greece's hands to achieve that. Third: A Greek exit would be manageable. Fourth: An exit would not be as orderly as some imagine," he said. Such an exit would spark a slump in growth, job losses and would be "very expensive. In Greece, in Europe and in Germany," said Asmussen. Asian stocks markets edged lower in subdued holiday trade on Monday with Tokyo stocks buoyed by a weaker yen amid dimming chances of fresh stimulus measures by the US Federal Reserve, traders said.