Commodities fuel Asia up

GLOBAL MARKETS

Asian stocks rose, led by Mitsubishi Corp and BHP Billiton, companies that may report higher earnings as commodity prices climb. Mitsubishi, which trades in goods ranging from oil and fuel to food, advanced after Daiwa Institute of Research raised share-price targets on Japanese trading companies, citing gains in prices of crude and copper. Marubeni Corp soared the most in three years after it said it was close to winning a contract to build a power and water plant in the United Arab Emirates.

The Morgan Stanley Capital International Asia-Pacific Index climbed 0.2 per cent to 153.18 at 7:27 p.m. in Tokyo, set for a record close. About three stocks fell for every two that rose. Japan's Topix Index added 0.1 per cent while the Nikkei 225 Stock Average dropped 0.1 percent.

Tata Motors led India's Sensitive Index to a 1.9 per cent drop, the most in the region, after a newspaper report said it planned to cut truck production. China's CSI 300 Index gained 1.2 per cent.

Europe

European stocks headed for the biggest decline in more than two months after the European Central Bank raised interest rates. E.ON AG and Iberdrola SA led a decline by utilities, while BNP Paribas SA and Spain's Banco Popular Espanol SA pushed banking shares lower. Thales SA, Europe's largest defense-electronics company, fell after Societe Generale SA downgraded the stock.

Mounting concern that rates will rise in Europe halted a rally that sent the Dow Jones Stoxx 600 Index to within 6 points of a record. US stocks slipped for the first time in a week yesterday after bond yields surged to a nine-month high amid signs the economy may be gaining momentum.

US

US stock-index futures fell after another Federal Reserve policy maker said inflation is too high. Borders Group Inc, the second-largest US bookseller, dropped after Goldman, Sachs & CO told clients to sell the shares because of reduced chances of a takeover. Panera Bread Co declined after the bakery chain cut its forecast for second-quarter profit and sales due to higher fuel costs.

Fed Bank of Cleveland President Sandra Pianalto said the central bank "cannot afford to be complacent" about inflation. Stocks posted their first decline in a week yesterday after bond yields surged and Fed Chairman Ben S. Bernanke said core inflation "remains somewhat elevated". Reports today may show labour costs increased and productivity growth slowed, adding to speculation that price increases will keep the Fed from reducing interest rates anytime soon.

Standard & Poor's 500 Index futures expiring in June lost 7.4 to 1526.20 as of 8:17 a.m. in New York. Dow Jones Industrial Average futures fell 54 to 13,561. Nasdaq-100 Index futures declined 10.75 to 1925.25.