Europe close: Stocks drift lower amid renewed gains for the euro

Renewed gains for the single currency dampened sentiment in European stockmarkets ahead of a meeting of euro area finance chiefs scheduled for the evening to discuss the disbursement of further aid and possible debt relief for Athens.

The euro was at 1.1232 against the US dollar after reaching an intraday high of 1.1261 after German Chancellor Angela Merkel described the currency as "too cheap".

At the closing bell, the benchmark Stoxx 600 was 0.09% lower to 391.14, with the Dax giving back 0.15% to 12,619.46 and the Cac-40 off by 0.03% to 5,322.88.

Milan's FTSE Mibtel ended 1.15% lower to 21,324.11.

The week before European equities endured their biggest decline since November.

Telecoms was the strongest group within the Stoxx 600 following positive comments out of JP Morgan.

Strategists at the investment bank reiterated their 'overweight' stance on euro area equities, singling out telecoms and banks as potentially interesting, while arguing that forecasts for euro area earnings growth in general were not excessive.

They recommended clients focus on domestic-focused names versus exporters, adding that they were bullish on the euro and cautious on the US dollar.

In parallel, front month Brent crude oil futures were 0.59% higher at $53.93 a barrel on the ICE.

Commenting on the likely content of Monday night's Eurofin meeting, Jim Reid at Deutsche Bank said: "the discussion today will be about how much debt relief is required which will subsequently pave the way for the next tranche of bailout aid to be released. The big sticking point continues to be the participation of the IMF and the ongoing clashes between the Fund and Germany."

At the weekend, Spanish Socialists voted in their party primaries to elect the more leftist of three candidates, Pedro Sanchez, to lead the the party.

Nevertheless, analysts at Barclays Research were relatively upbeat telling clients they still expected Spanish economic growth to outperform that of the rest of the Eurozone although a slightly negative reaction was expected in the country's sovereign debt.

Spain's benchmark 10-year bond yield was higher by four basis points to 1.62%.

Still on the economic calendar for Monday, at 14:00 BST investors were waiting on a speech from the president of the Federal Reserve bank of Philadelphia, Patrick Harker, with his opposite number at the Minneapolis Fed, Neel Kashkari, set to to take to the podium a half hour later together with Chicago Fed chief Charles Evans after the close of markets in New York.

Clariant advanced after announcing it was to acquire Huntsman Corp. creating a company with a combined market value of $14bn.

Volkswagen was seeing slight gains on the back of a Bloomberg report that private equity outfits Permira and CVC Capital Partners were running the ruler over its Italian motorcycle unit, Ducati.

Analysts Berenberg upped their target for shares of ING from €12.5 to €13.0, staying at a buy, with JP Morgan
downgrading Vinci from 'overweight' to 'neutral'.

Meanwhile, Dassault Aviation was reportedly eyeing a sale of its Rafale fighter jet to Mumbai.

Brussels asked that private investors inject another €1.3bn into Banca Monte dei Paschi di Siena, according to Il Messaggero.