Euro, European shares recover but Spain risks weigh

Demand for safe-haven assets kept German bond futures near record highs on Thursday, while European shares and the euro regained some stability although worries over Spain and its troubled banks are weighing on market sentiment.

The single currency and world shares are poised for their biggest monthly drops since September while the fall in oil prices in May is set to be the largest for two years as the escalation in the euro-zone crisis stokes fears of slower growth.

"There's a huge amount of flight-to-quality moves right now. Only a policy coordination in Europe can stop this," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank.

German Bund futures steadied at 145.30, having hit a record high of 145.47 in the previous session when the two-year German bond yield fell to a record low of just 0.002 percent.

Ten-year cash yields were also little changed at 1.27 percent.

The euro was up 0.2 pct at $1.2390, having dropped to a fresh near two-year low of $1.2358 earlier in Asian trade, while the dollar index stood at 82.899, after it hit a 20-month high of 83.11.

Worries over the political crisis in Greece and the situation in Spain have sent the single currency down 6.6 percent against the U.S. dollar this month.

European shares opened slightly higher after steep losses on Wednesday, with the FTSEurofirst 300 up 0.4 percent at 979.65 points, on track for its biggest monthly loss since August when markets were similarly beset by fears over Europe's debt crisis.