Energy scrips decline

GLOBAL MARKETS

Asian energy stocks fell, led by Inpex Holdings, after oil dropped for a third day. Macquarie Bank and HSBC Holdings gained on speculation that the US government will take steps to contain subprime mortgage losses that triggered declines in global equities.

Toyota Motor climbed after the Nikkei newspaper reported it may increase production. Shares of Trend Micro and Axa Asia Pacific Holdings jumped after the companies reported higher earnings.

The Morgan Stanley Capital International Asia-Pacific Index lost 0.6 per cent to 150.42 in Tokyo, set for its lowest close in eight weeks. A measure of the MSCI index's 10-day historical price volatility was at 22.8, after climbing last week to 25.1, the highest since March.

The Topix index slid 0.5 per cent, while the Nikkei 225 Stock Average was little changed. Benchmarks retreated in Hong Kong, Taiwan, Indonesia, Singapore, Pakistan and Thailand. They advanced elsewhere.

Europe

European stocks rose on speculation that the Federal Reserve will signal today that credit market losses may slow US economic growth, reigniting speculation that the central bank will lower borrowing costs.

Barclays and Societe Generale led the advance after Dresdner Kleinwort raised its recommendation on the European banking industry. Dexia climbed after the owner of US bond insurer Financial Security Assurance said it won't have losses on subprime mortgages. Financial shares also gained in Asia today, led by Macquarie Bank and HSBC Holdings.

US stocks rallied the most in four years yesterday, led by financial companies, on speculation that the government will take steps to limit losses in mortgage lending. The Standard & Poor's 500 Index climbed 2.4 per cent, while the Dow Jones Industrial Average rose 2.2 per cent.

The Dow Jones Stoxx 600 Index added 1.2 percent to 372.97 in London with all 18 industry groups gaining.

US

US stock-index futures were little changed before Federal Reserve policy markets set interest rates and comment on the economy.

Bear Stearns gained in Europe after the Financial Times reported that James Cayne, chief executive officer of the fifth- biggest US securities firm, has been calling the heads of other Wall Street firms to assure them of the bank's financial soundness.