China deals chilling blow

STOCK REPORT

Asian stocks fell, led by China Mobile and Mitsui, after Chinese regulators told banks to cool lending that has fueled the world's fastest economic expansion.

China Mobile, the world's largest mobile-phone operator by users, and Industrial and Commercial Bank of China, the nation's biggest lender, dropped for a third day in Hong Kong. Mitsubishi and Mitsui, Japan's two largest trading companies, slid to the lowest in more than two months in Tokyo.

"What is Asian growth without China?" said Leslie Phang, who helps oversee $1 billion at the Commonwealth Private Bank in Singapore. "If China goes, everything else goes."

The Morgan Stanley Capital International Asia Pacific Index lost 0.5 per cent to 157.52 as of 5:10 pm in Tokyo, bringing this month's drop to 8 per cent. Seven of the measure's 10 industry groups fell on Monday. Japan's Nikkei 225 Stock Average declined 0.7 per cent to 15,043. Benchmarks slid across the region except in Australia and the Philippines.

The China Banking Regulatory Commission said it's giving "guidance" to banks to cool lending that's already topped its goal of 15 per cent growth this year and threatens to overheat the world's fastest-growing major economy.

EUROPE
European stocks advanced, rebounding from a two-month low, as investors speculated banks are attractive takeover targets and oil's climb above $95 a barrel buoyed energy companies.

Bankinter SA jumped to a three-month high after Credit Agricole SA bought a stake in the Spanish lender. Standard Chartered rallied after reports said Chinese banks were keen on buying a stake in the London-based company.

Royal Dutch Shell and StatoilHydro ASA paced gains by oil shares. The Dow Jones Stoxx 600 Index added 0.1 per cent to 363.24 as of 9:20 am in London as 13 of the 18 industry groups advanced.

The index closed last week at the lowest since September 17 as declines in commodity prices weighed on mining companies and a weak dollar hurt exporters.

US
US stock-index futures declined on concern that the American economy may slip into recession next year and growth in China will slow. Newmont Mining and Alcoa dropped in Germany.

Newmont, which produces copper and gold, and Alcoa, the world's second-biggest aluminum company, fell with metal prices amid speculation that global demand may falter. Hewlett-Packard decreased in Europe before reporting fourth-quarter earnings.

Standard & Poor's 500 Index futures expiring in December lost 3.7 points to 1,456.5 as of 10:40 am in London.

Dow Jones Industrial Average futures fell 26 points to 13,164 and Nasdaq 100 Index futures decreased 5 points to 2,050.25.

The number of economists forecasting the US will slip into recession almost doubled over the last two months, a survey by the National Association for Business Economics showed. Analysts said the holiday sales season may be the worst for American retailers in at least five years.