World stocks lower on JPMorgan loss, China slowing

World stock markets were mostly lower Friday as traders eyed a large surprise trading loss at JPMorgan Chase, political upheaval in Greece and signs of slowing economic growth in China.

In trading in Europe, the FTSE 100 index of leading British shares dropped 0.2 percent at 5,535.91 while Germany's DAX rose 0.1 percent to 6,523.07. The CAC-40 in France slumped 0.7 percent at 3,109.82.

Wall Street headed for a lower opening. Dow Jones industrial futures fell 0.4 percent to 12,780 and S&P 500 futures lost 0.4 percent to 1,351.70.

Asian shares also slumped. Japan's Nikkei 225 index fell 0.6 percent to 8,953.31 and South Korea's Kospi lost 1.4 percent at 1,917.13. Hong Kong's Hang Seng fell 1.3 percent to 19,966.17.

JPMorgan, the largest U.S. bank, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.

The company's stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks threatened to undermine investor confidence.

"This has permeated to the wider market as investors assess the possible systemic risk, adding another layer of caution to the fragile trading environment," said Jordan Lambert, a trader at Spreadex.

"When such shocks occur, it is wise to err on the side of caution and consider whether it is a possible 'tip of the iceberg' scenario, especially when one contemplates the interconnectedness of the banking system," he said.

Asian stocks jumped in the first two months of the year but have since traded slightly lower amid investor concern that economies in the U.S. and China may grow less than previously expected.

Greek politicians have so far failed to form a government after Sunday's elections undermined support for the ruling coalition. Greece is buckling under the weight of a deep recession and government austerity measures designed to control surging debt levels.

Meanwhile, China said Friday that its inflation rate fell to 3.4 percent in April from 3.6 percent the previous month, giving the government more room for possible stimulus measures. China also said industrial production rose 9.3 percent from a year earlier in April, slowing from a nearly 12 percent increase in March, raising concern that the world's second-biggest economy is continuing to weaken.

China grew by 8.1 percent in the first quarter, down from the previous quarter's 8.9 percent.

Meanwhile, India said Friday its industrial output fell 3.5 percent in March from a year earlier.

"Now that you have the European uncertainty coming back in a bigger way, I think people are going to hold back a bit longer," said Lorraine Tan, director of equities research at credit ratings agency Standard & Poor's. "The key will be for China to grow at least 8 percent this year to help fuel global growth and demand."

Australia's S&P/ASX 200 fell along with benchmarks in Singapore, Taiwan and New Zealand.

Hong Kong's YGM Trading Ltd. fell 2.1 percent after announcing late Thursday its plans to buy British clothing brand Aquascutum for $24.2 million. Singapore Telecommunications Ltd., or SingTel, rose 0.6 percent after the mobile phone operator said Thursday profit jumped 30 percent in the first quarter.

Benchmark oil for June delivery was down 88 cents at $96.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 27 cents to settle at $97.08 per barrel in New York on Thursday.

In currencies, the euro fell slightly to $1.2947 from $1.2951 late Thursday in New York while the dollar was steady at 79.91 yen.


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