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AAP

January 29 2013, 04:47AM

Stocks Europe Close

LONDON, Jan 28 AFP - Europe's main stock markets have closed mixed, as investors took a breather from a strong rally last week to digest mixed data from the US and eurozone.

At close on Monday, London's FTSE 100 index of leading companies rose 0.16 per cent to 6,294.41 points, while Frankfurt's DAX 30 dropped by 0.32 per cent to 7,833 points. In Paris the CAC 40 edged up 0.07 per cent to 3,780.89 points.

European equities and the euro had rallied on Friday, with Frankfurt hitting a five-year high, following positive German data.

Trade is "subdued in Europe, with little on the economic and corporate front, providing investors an opportunity to pause for breath following recent gains across European markets", said Joe Rundle, Head of Trading at ETX Capital.

In foreign exchange trading on Monday, the European single currency edged up $US1.3459 from $US1.3457 late in New York on Friday, when the euro also hit an 11-month high versus the greenback.

The single currency had reached a high point before the weekend after the European Central Bank revealed 278 eurozone banks would repay early 137 billion euros ($A176 billion) of ultra-cheap, three-year loans.

"Since this amount was bigger than expected, the market has read this as an indication of returning health in the eurozone banking sector," said Jane Foley of Rabobank.

But in a reminder that all was not rosy, data on Monday showed bank lending to private households in the euro area contracted again in December as the region's crippling debt crisis continues to put a freeze on demand for credit.

Eurozone bank loans to the private sector declined by 0.7 per cent in December compared with the same month in 2011 after already shrinking by 0.8 per cent the previous month, the European Central Bank said in a statement.

On the London Bullion Market on Monday, gold prices fell to $US1,656.75 an ounce from $US1,660 on Friday.

In stock market activity, British no-frills airline easyJet retreated 0.68 per cent to 935 pence, a day after saying its chairman, Mike Rake, was to step down this year, following a long battle with the company's founder and largest shareholder, Stelios Haji-Ioannou.

Asian markets began the week on a mixed note, with the Nikkei sinking on profit-taking after breaking 11,000 points in early trade, while Seoul closed lower.

In the United States, stocks opened slightly higher after new orders for durable manufactured goods came in higher for December, led by a jump in commercial aircraft orders.

But in midday trade, shares turned mixed with Caterpillar heading higher despite its mixed fourth-quarter earnings report.

The Dow Jones Industrial Average was unchanged, the broad-based S&P 500 slipped 0.05 per cent, while the tech-heavy Nasdaq Composite rose 0.50 per cent.

Caterpillar shares added 1.2 per cent despite a 55 per cent drop in fourth-quarter earnings, hit by an expected $US580 million ($A557 million) writedown on a China acquisition that the company now says was tainted by fraud, and revenue impacted by the global economic slowdown.

On Friday the Dow rose to its best level since October 2007 and the S&P 500 finished above 1,500 points for the first time since December 2007.