LONDON, Feb 24 (Reuters) - Europe's stocks benchmark fell more than 1 percent on Friday while German and French indexes slid by their most in nearly 5 months as jitters in the bond markets over political risk looked to have spilled over into equities.
Futures on the European bluechips index fell 1.4 percent with traders pointing to a bout of selling in the afternoon session as a reason that exacerbated earlier weakness in stock markets.
Banks and commodity-related sectors led losses across Europe following a slump in metals prices overnight, subdued forecasts from the likes of BASF and weak results from Standard Chartered and Royal Bank of Scotland.
The STOXX 600 was down 1.2 percent in afternoon trading and was poised for its third straight session of losses.
"Political uncertainty is the only explanation. The French-German government bond spread is widening," an equity sales trader at a European bank said.
European banks, the sector most sensitive to bond spreads, fell more than 2 percent while the basic resources slid more than 3 percent.
Both sectors have been among the biggest beneficiaries of the "reflation rally" that has lifted world stocks to record highs and which has favoured shares of companies more geared to growth and inflation.
Meanwhile, UBS warned on Friday that French stocks appeared "too relaxed" given the impact that uncertainty around the election has had on government bonds.
"(French equities) rode the cyclical rally in H2-16 and turned a blind eye to the jump in the OAT spread," said strategists at UBS in a note, referring to the extra return demanded by investors to hold French rather than German debt. (Reporting by Helen Reid, Editing by Vikram Subhedar)