European Shares Suffer First Weekly Drop Since April

Concern about Iraq and Ukraine and subdued economic data left European shares facing their first week of losses since early April on Friday. Gold rose to near a two-month high.

Other safe-haven assets – the yen, Swiss franc and German and U.S. government bonds – were also in demand as investors backed away from the riskier bets they have been making for much of this year.

Stock rose slightly in London .FTSE, Frankfurt .GDAXI and Paris .FCHI but fell in Greece and Portugal. Losses earlier in the week meant European shares were set to bring a 10-week run of gains to an end.

Fighting between Iraqi forces and insurgents raged in the home town the late dictator Saddam Hussein and Russia warned of “grave consequences” as Ukraine signed a trade and political agreement with the European Union.

The uncertainty, along with a run of disappointing data this week ECONG7, meant that Wall Street was poised for another subdued start ESc1 and its second week of losses in the last three.

“Part of it was the GDP shock two days ago, then we get the soft consumer spending data,” said Philip Marey, a U.S. focused economist at Rabobank. “A few weeks ago, there was this big exuberance and the sky was the limit and now those hopes have really faded.”

Gold was closing in on a fourth straight weekly gain at $1,315 an ounce, as the geopolitical unrest boosted its appeal and the soft U.S. data weakened the dollar.

via Reuters

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