* China GDP grows 7.7 pct yr/yr in Q4, vs forecast 7.6 pct
* Deutsche Bank reports Q4 loss, releases results early
* European, most Asian shares lower amid risk aversion
* Ireland bonds make ground after rating upgrade
* Turkey remains in focus as lira hits record low
By Marc Jones
LONDON, Jan 20 Big losses for Germany's biggest
bank meant European markets started the week on a sour note on
Monday as slightly better than expected Chinese data failed to
dispel a general air of caution.
Deutsche Bank reported a surprise pre-tax loss of
1.15 billion euros for the fourth quarter of 2013 due to heavy
costs for litigation, restructuring and balance sheet reduction.
The bank was originally scheduled to report its results on
Jan. 29, but opted to release them early after the Wall Street
Journal on Friday reported that a profit warning was possible.
Its shares were down almost 5 percent in early afternoon
trading, dragging down bank stocks across Europe as
Germany's Dax, down 0.3 percent, also led the region's
lengthy list of losing bourses.
Liquidity was lacking with U.S. markets closed on Monday for
a holiday. The Dow Jones index ended last week with a
slim gain of 0.1 percent after some disappointing earnings,
while the S&P 500 lost 0.2 percent for the week.
In Asia, a majority of share markets had stayed in the red
on Monday, with Tokyo off 0.6 percent, Sydney
down 0.3 percent and Shanghai down 0.6 percent, adding
to a miserable few weeks.
China's annual economic growth slowed a tick to 7.7 percent
last quarter, which was just ahead of market forecasts for 7.6
percent and at least countered fears that monetary tightening
might have caused a sharper pullback.
"The economy may be a little more robust than people thought
coming into 2014," said Tim Condon, an economist at ING Group in
"I had thought the monetary tightening in 2013 would pose a
downside risk. The numbers reduce that downside risk."
EURO IN FOCUS
Other data out of China was much in line with forecasts,
with retail sales growing 13.6 percent in December from a year
earlier, while industrial output rose 9.7 percent.
That resilience was considered a positive for Australia,
given that China is its single biggest export market, and helped
the Australian dollar clamber off a three-year trough of $0.8756
to reach $0.8814.
Yet the Australian currency remains out of favour, having
shed 2.4 percent last week due to disappointing domestic data
and demand for U.S. dollars and yen.
The yen was in favour again on Monday as the general mood of
risk aversion led speculators to cut back on short positions,
which has been a very popular trade for months now.
The Bank of Japan holds its policy meeting on Tuesday and
Wednesday and is expected to maintain its massive asset-buying
The euro was particularly affected, dropping to a six-week
low at one stage against both the dollar and the yen before
recovering to $1.3560 and 141.00 yen. The
dollar eased to 103.95 yen from an early 104.32.
A sovereign rating upgrade for euro zone bailout poster
child Ireland helped ensure the recent rally in periphery debt
rumbled on in debt markets , though
Deutsche's troubles darkened the mood.
The unexpected loss is likely to compound the problems that
have dogged the bank over the past year, especially a
lengthening list of lawsuits and regulatory matters, and to
redouble pressure on co-chief executives Anshu Jain and Juergen
Fitschen to prove their turnaround plan is on track.
The EU's quarterly earnings season shifts up a gear this
week. STOXX Europe 600 companies are seen missing
consensus by 0.4 percent on revenues and by 0.9 percent on
earnings, according to StarMine SmartEstimates, which focuses on
the predictions by the most accurate analysts.
Among emerging markets, the Turkish lira touched a new
record low on Monday as a corruption scandal and fading hopes
for a policy reaction from the central bank to support the
battered currency weighed on markets.
Societe Generale strategist Kit Juckes said markets remained
nervous about the impact on under-pressure developing nations as
the U.S. Fed scales back its stimulus this year, adding with
reference to Turkey, "trouble continues at mill".
In commodities, spot gold made an early push to a
five-week peak of $1,259.46 an ounce, thanks in part to talk of
strong physical demand from Asia. It was last at $1,256.36.
Data from the Commodity Futures Trading Commission also
showed on Friday that hedge funds and money managers raised
their bullish bets in gold and silver futures and options for a
third week amid a decline in stocks.
Brent crude oil for March delivery was off 6 cents
at $106.42 a barrel, while U.S. crude fell 58 cents to
$93.79. Having had its best week in almost a year last week,
Nickel also dropped, falling 2.4 percent to $14,340.