European stocks mostly fell Thursday and the euro struggled to recover from an 11-month dollar low, with investor sentiment extremely fragile before another key Italian bond auction, dealers said. In morning deals, London\'s FTSE 100 slid 0.11 percent to 5,501.36 points, the Paris CAC 40 dipped 0.11 percent to 3,067.79 points, while Frankfurt\'s DAX 30 added 0.20 percent to 5,782.16 points. Milan\'s FTSE Mib benchmark index declined by 0.30 percent to 14,752.73 points. In earlier Asian trade, the European single currency tumbled to $1.2888 -- which was the lowest level since January 10 -- on eurozone debt fears in thin holiday week trading. It later stood at $1.2930 in morning London deals. And the shared unit also slumped to another ten-year low against the safe-haven Japanese currency, at 100.33 yen -- last seen in June 2001. Asian markets mainly fell earlier on Thursday as concerns over the eurozone debt crisis refused to abate. European equities also slid on Wednesday as investors fretted over Italy\'s second debt auction in just two days. While Italy paid sharply lower rates on Wednesday to raise 9.0 billion euros ($11.8 billion) in a six-month bond sale, providing an early boost to equities, market jitters have since returned. \"Today\'s Italian auction is more important,\" Saxobank chief economist Steen Jakobsen told AFP. \"Selling six-month bills is easy as the risk involved is minimal. Today\'s auction is a different story, selling 8.5 billion euros of three, seven, and ten-year bonds is another ball game.\" Following Wednesday\'s successful auction, analysts speculated that the European Central Bank (ECB) providing eurozone banks with nearly half a trillion euros in three-year low-interest loans may have helped the sale. Markets took scant relief from Wednesday\'s debt sale, with broader eurozone worries still dominating trade. The average rate on the debt for Rome was 3.25 percent, half the 6.50 percent paid in a similar sale in November, when worries that Italian finances might collapse filled the markets. \"The last Italian bond auction seems to have lifted the spirits a little bit, however, a real test will be the today\'s auction for bonds with maturities longer than three years,\" added trader Anita Paluch at Gekko Global Markets. \"As much as the investors appreciated the introduction of austerity measures by Italian government, the far more important issue is the Italy\'s growth potential while maintaining fiscal discipline and this is what Italy needs to convince the markets of. \"Good results -- ie. lower yields and satisfactory coverage ratios -- may lead to increase demand in more risky assets.\" Thin holiday-week trading conditions are meanwhile sparking volatile market movements, ahead of the New Year break. \"It is end of month, end of year, some \'gaming\' is expected as the trading books are pretty much closed for the year,\" added Jakobsen. \"The Italian auction could suffer from this as the risk willingness this close to book close is expected to be small if not for the supposed \'natural bid from Italian banks\'. \"There is only two buyers of Italian bonds: the European Central Bank and Italian banks, which seem forced to buy on government orders. \"Italy could be first victims when the calendar moves over to 2012, following Greece, Ireland and Portugal down the line of economies unable to sustain economic activity without the help of EU and IMF.\" In Asia on Thursday, Sydney stocks fell 0.43 percent, Tokyo shed 0.29 percent and Hong Kong dropped 0.65 percent in value.