China fuels Asian fall

Asian stocks fell for the first time in four days after former Federal Reserve Chairman Alan Greenspan warned that Chinese equities face a "dramatic contraction."

BHP Billiton and Taiwan Semiconductor Manufacturing led declines on concern a slump in Chinese shares would spread to other markets. China's benchmark CSI 300 Index slid as much as 2 per cent from a record after opening higher.

The Morgan Stanley Capital International Asia-Pacific Index lost 0.3 per cent to 149.52 at 7:24pm in Tokyo, halting a three-day, 1.8 per cent advance. The measure fell 7 per cent in the four days after Chinese shares tumbled on February 27 by the most in 10 years, sparking a global rout that wiped out about $3.3 trillion of stock-market value.

Japan's Nikkei 225 Stock Average slid 0.1 per cent to 17,696.97.Declines were limited after Mizuho Securities Co lifted its rating on Japan's five largest trading houses, including Itochu Corp and Marubeni Co. Benchmarks fell elsewhere in the region, except in New Zealand, Pakistan and the Philippines. Markets in Hong Kong and South Korea were closed for holidays today.

Europe

European stocks declined on concerns on China stock bubble. BHP Billiton and Arcelor Mittal paced a drop by companies most affected by slowing demand from China.

The Dow Jones Stoxx 600 Index dropped 0.4 per cent to 394.85 as of 10:36am in London. The Stoxx 50 fell 0.4 per cent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, decreased 0.7 per cent.

Greenspan's comments may stall gains in the Stoxx 600, which yesterday reached its highest since September 2000 on takeover speculation. The Dow Jones Industrial Average fell 0.1 percent yesterday, as did the Standard & Poor's 500. Asian stocks slid today.

US

US stock-index futures dropped on lower-than-expected earnings as investors awaited reports on durable goods orders and new home sales that may provide further clues on the outlook for economic growth and interest rates.

Standard & Poor's 500 Index futures expiring in June decreased 1.5 to 1524 as of 8:21am in New York. Dow Jones Industrial Average futures slid 8 to 13,550. Nasdaq-100 Index futures retreated 2 to 1908.25.

Signs the economy is expanding along with a two-month gain in benchmark US stock indexes have pushed 10-year yields up 35 bps in the past three months. Federal funds futures contracts showed traders see a 23 per cent chance of a rate cut by September, down from 46 per cent two weeks ago.