China curbs dent Asia

GLOBAL MARKETS

Asian stocks fell to the lowest in more than a week after China curbed bank lending and the US economy expanded at the slowest pace in four years. The Morgan Stanley Capital International Asia-Pacific excluding Japan Index lost 0.4 per cent to 428.10 as of 6:43 pm in Hong Kong, the lowest since April 19. The measure has gained 4.7 per cent this month, poised for its biggest monthly advance since November.

Taiwan's Taiex index slid 0.9 per cent, while Hong Kong's Hang Seng Index declined 1 per cent. Indexes fell elsewhere, except in Australia, New Zealand, Thailand and Pakistan. Japan's market was closed today for a public holiday.

Samsung Electronics Co, which accounted for about 16 per cent of South Korean exports last year, lost 1 per cent to 574,000 won.

Taiwan Semiconductor Manufacturing Co, the world's biggest maker of customised computer chips, slipped 0.4 per cent to NT$68.70. LG.Philips LCD Co, the world's second-largest maker of liquid-crystal displays, dropped 1.3 per cent to 38,200 won.

Shares fell after China's banks were told to put aside 11 per cent of deposits starting May 15, up from 10.5 per cent, the seventh rise in 11 months. Growth in China, the world's fastest-expanding major economy, accelerated to 11.1 per cent in the first quarter from 10.4 per cent in the previous three months, driven by a trade surplus that almost doubled to $46.4 billion.

US

US stocks fell and the Dow Jones Industrial Average retreated from a record on increasing signs growth in the world's biggest economy is faltering. Consumer spending rose less than forecast in March, a Commerce Department report showed, raising doubts about the staying power of what Federal Reserve Chairman Ben S Bernanke called the mainstay of economic growth. A separate measure of US business activity fell from the highest level in almost two years, suggesting companies expanded at a slower pace.

Europe

European stocks resumed an April rally on speculation takeovers will increase in the telecommunications industry and after analysts lifted their projection for construction company shares.

A surge in takeovers and earnings growth has lifted the Dow Jones Stoxx 600 Index to a 6 1/2 years high this month, with the benchmark set to post its biggest monthly advance this year. So far this year, mergers in Europe have totaled $937.2 billion, according to data compiled by Bloomberg. Deals reached a record $1.6 trillion in 2006.

Of the 17 companies in the Stoxx 50 that have reported first-quarter earnings so far, 11 beat analysts' estimates.

The Stoxx 600 Index rose 0.2 per cent to 386.71 as of 2:48 pm in London, heading for a gain of 3.4 per cent in April. The Stoxx 50 and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, gained 0.2 per cent.

National benchmarks increased in 12 of the 18 western European markets. The UK's FTSE added 0.6 per cent. France's CAC 40 increased 0.5 per cent and Germany's DAX climbed 0.4 per cent.

Cable & Wireless gained 4 per cent to 188.5 pence. The UK's second-biggest phone company said it has no immediate plans to sell or spin off its businesses after the Observer said the company might split itself in two.