LONDON (Reuters) - European shares and commodities fell on Friday while safe haven German bonds jumped, as deepening euro zone political turmoil and weak economic data from China raised growth concerns, while a shock trading loss from JPMorgan (JPM.N) added to market jitters.
The growing risk aversion put the MSCI world equity index .MIWD00000PUS on course for a second weekly loss of over 2 percent and even sent gold, often used as a safe haven, down more than half a percent to around $1,585.86 an ounce.
The euro dipped to a fresh 3-1/2 month low of $1.2905 as news of JP Morgan’s losses from a failed hedging strategy spooked investors already anxious about the political deadlock in Greece.
JPMorgan’s news “is worrying because this is a company which was perceived to being absolutely excellent in risk management,” said Guy Stear, head of research at Societe Generale in Hong Kong.
Falls in bank stocks helped push the FTSE Eurofirst .FTEU3 index of top European shares down 0.6 percent to 1,013.26 points at the start of trading.
Earlier China added to fears about a deepening global slowdown by reporting that industrial production from its huge factory sector had weakened sharply in April. It also said consumer inflation had moderated to 3.4 percent in April, which could allow for a further moderate easing of policy.
In Europe the focus will turn to the European Commission’s short-term economic forecasts due later, which will shed light on the scale of the recession across the region and possibly on Germany’s rebound.
Markets are also waiting to hear how Spain aims to shore up the country’s lenders, which could send shares lower if its plans disappoint.
Editing by David Holmes