US sales dampener

GLOBAL MARKETS

Asian shares fell, led by Sony Corp and BHP Billiton, on concern figures this week will show a drop in US home sales, signaling declining demand in the region's largest export market.

Citic Securities Co led the CSI 300 Index to its biggest drop in three weeks after China's central bank governor Zhou Xiaochuan said the country's shares may be overvalued and interest-rate increases couldn't be ruled out.

The Morgan Stanley Capital International Asia-Pacific Index slid 0.4 per cent to 153.03 as of 7:15 p.m. in Tokyo. Japan's Nikkei 225 Stock Average lost 0.6 per cent. Taiwan Semiconductor Manufacturing Co led the Taiex Index to a seven-year high after Citigroup Inc raised its recommendation on the island's stock market. Thailand, India, Pakistan and Vietnam were the only other benchmarks in the region to rise.

Europe

European stocks declined for a third day, led by financial shares and utilities, after the Bank for International Settlements said central banks will need to keep raising interest rates to quell inflation.

Deutsche Bank AG, Germany's largest bank, and French utility Suez SA paced the drop. France Telecom SA fell the most in two weeks as the French government began selling shares worth as much as ¤3.8 billion ($5.1 billion). Anglo American Plc and Antofagasta Plc led mining companies lower after Cazenove downgraded the stocks.

The Dow Jones Stoxx 600 Index has retreated 2.8 per cent since reaching a 6 1/2-year high on June 1 on speculation increased borrowing costs and higher oil prices will weigh on corporate earnings.

The Stoxx 600 fell for a third day, falling 0.7 per cent to 389.87 at 11:27 a.m. in London as all 18 industry groups declined. National benchmarks fell in 16 of the 18 western European markets, except for Portugal and Iceland. France's CAC 40 slid 0.9 per cent. The UK's FTSE 100 fell 0.3 per cent and Germany's DAX lost 1.1 per cent.

US

US stock-index futures rose before a private report that may show home resales fell last month, giving more room for the Federal Reserve to cut interest rates. US stocks retreated June 22 as concern intensified that banks will be saddled with losses on mortgage bonds. Today's housing report may reduce chances the Fed will lift rates. Standard & Poor's 500 Index futures expiring in September added 1.90 to 1522.80 as of 12:20 p.m. in London. Dow Jones Industrial Average futures increased 12 to 13,518. Nasdaq-100 Index futures rose 5 to 1953.