European stocks close off their lows Monday, after hitting five-year highs last week, amid hopes for further central bank stimulus and as investors largely shrugged off a tepid euro zone economic report.
Trading however was thin, with London's FTSE 100 closed on Monday for a public holiday.
European Central Bank president Mario Draghi said the central bank is closely watching incoming data and is ready to take further action if needed to address economic weakness. In a speech in Rome, Draghi commented on the ECB's cut in its key interest rate last week to a record low of 0.5 percent, and suggested that more steps could be taken if data warranted it.
The euro extended its losses against the dollar to hit a session low following Draghi's comments.
The euro zone's blue chip Euro STOXX 50 index closed 0.5 percent lower at 2,750.52 points, pausing after the previous week's gains when it surged to a near-two year peak of 2,764.17. The DAX closed down 0.1 percent, just 0.5 percent off the all-time record high of 8,151.570.
Consumer demand for the euro zone also continued to show signs of weakness, with data for March showing a 0.1 percent month-month decline on Monday.
Earlier, the euro zone services and composite PMI data showed the euro zone's business downturn dragged on in April. Markit's euro zone composite PMI edged up in April but remained below the 50-points level that divides growth from contraction.
In Spain, the jobless number for April fell 0.9 percent month-on-month, according to the country's Labor Ministry. This was a fall of 46,050 people and still leaves 5 million people out of work in the country.
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In Asia, commodity stocks helped equity markets notch up solid gains on Monday, with the U.S. jobs data lifting investor confidence.
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In France, tens of thousands of French protesters from the far-left marched in Paris to denounce economic austerity on Sunday, to mark the one-year anniversary of President Francois Hollande coming to power.
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Italy's new Prime Minister Enrico Letta said on Sunday that he will present a plan to boost employment that could potentially be used as an EU-wide template.
The plan would allow investments related to job creation from budget calculations, he said in a TV interview on Sunday. Letta is due to travel to Madrid to meet Spanish Prime Minister Mariano Rajoy on Monday.
In stocks news, shares in industrial gases producer Linde rose by 2.83 percent after reporting a 12.6 percent gin in first-quarter operating profit.
E.ON shares fell 7.99 percent as the energy company traded ex-dividend on Monday.
Restaurant group Autogrill traded 6.65 percent higher after a de-merger of its travel, retail and duty free business was approved.