LONDON (Dow Jones)--European stocks fluctuated between small losses and small gains Tuesday, as investors weighed up euro-zone sovereign debt contagion fears against the prospects of upbeat U.S. data. "The markets are growing increasingly skeptical about the euro-zone's plans to deal with the crisis," said Dolmen Securities. "The European Commission and the ECB continue to focus on the liquidity nature of the crisis, while refusing to accept any potential solvency issues. The markets are concerned that the underlying growth rates assumed in the recovery plans for the peripheral economies are overly optimistic and that these economies will struggle to grow out of their increasing debts," it added. By 1125 GMT, the Stoxx Europe 600 index was up 0.2% at 262.56. London's FTSE 100 index was flat at 5550.30, Frankfurt's DAX index was up 0.4% at 6725.14, and Paris's CAC-40 index was down 0.2% at 3630.69. At the same time, U.S. stock-index futures were in the red, with the December Dow Jones Industrial Average contract down 0.3% at 11,010, while the S&P 500 contract for the same month was also down 0.3% at 1183.30. Stocks opened up Tuesday, buoyed by a late bounce on Wall Street on signs of healthy retail activity after strong Black Friday sales figures and on expectations of further positive U.S. data releases. "Market participants are now hoping that the U.S. data this week can stave off the risk-aversion trade, with the key monthly jobs report, due Friday, where a relatively strong outcome is the market consensus, said strategists at Lloyds TSB Corporate Markets. However, the momentum soon faltered, as worries crept back into the market about which European nation would be next to require a bailout. Adding to these concerns, Portuguese banks are facing severe challenges in the coming years, including finding new sources of funding and tackling slow economic growth at home that will hit their profits, the Bank of Portugal warned Tuesday in its semiannual Financial Stability Report. According to the report, banks will have to find new ways to fund themselves in the medium term as the European Central Bank withdraws its emergency funding, although the Bank of Portugal said it is unlikely that will be done any time soon. Still, basic resource stocks continued to lend support as metals prices firmed. ArcelorMittal was 2.1% higher, while African Barrick Gold rose 1.3%. The Stoxx Europe 600 index for the sector was up 1.0%. Meanwhile, euro-zone flash CPI and jobless data failed to provide much of an impetus, with both sets of figures in line with expectations. The euro bloc unemployment rate for October came in at 10.1% from a revised 10.0% in September, while consumer price inflation in the euro area held steady in November, up 1.9%. Still to come on the economic calendar, U.S. consumer confidence at 1500 GMT is expected to have pushed higher in November to around 52.0, while the November Chicago purchasing managers' index at 1445 GMT is likely to have edged higher to around 61.0, said Credit Agricole. In Asia, stock markets ended mostly lower Tuesday, with the Chinese market slumping on continued concerns about further measures to tighten monetary policy, although the Seoul market edged higher amid an uneasy calm on the Korean peninsula. Japan's Nikkei Stock Average was down 1.9%, while South Korea's Kospi Composite was 0.5% higher. China's Shanghai Composite Index slid 1.6%, but was off earlier lows, as was Hong Kong's Hang Seng Index, down 0.7%. In the European currency markets, the euro remained under selling pressure after it fell below $1.31 for the first time since Sept. 21, and below Y110 for the first time since Sept. 15, as the Ireland bailout package failed to ease concerns that debt problems could spread to other European nations. By 1140 GMT, the single currency was trading at $1.3041, down from $1.3125 late Monday in New York, and at Y109.25, down from Y110.62. The dollar was trading at Y83.78 down from Y84.26. Among other asset classes, spot gold was at $1374.55 per troy ounce, up $6.90 from its New York close Monday. But January Nymex crude oil futures were down 21 cents at $85.52 per barrel. In the bond markets, the December bund futures contract was up 0.62 at 127.69 while the spreads between 'peripheral' and 'core' euro-zone sovereign bonds rose further. -By Michele Maatouk and Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9447; michele.maatouk@dowjones.com

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