China leads Asian fall

GLOBAL MARKETS/ STOCK REPORT

China's stocks tumbled, leading declines in Asia, after lawmaker Cheng Siwei said the nation's shares are overvalued, adding to speculation the government will step up efforts to slow fund inflows. China Vanke Co dropped.

"There is already a bubble here,'' said Zhang Ling, who oversees about $1.1 billion at ICBC Credit Suisse Asset Management Co in Beijing. "Concern is mounting that the government will intervene to pop the bubble.''

The Shanghai and Shenzhen 300 Index plunged 6.5 per cent, the biggest slump since the measure was created in April 2005. The Morgan Stanley Capital International Asia-Pacific Index lost 0.6 per cent to 140.21 at 7 pm in Tokyo. The measure was little changed in January, after rallying 9.4 per cent in the previous three months. Japan's Nikkei 225 Stock Average lost 0.6 per cent to 17,383.42.

China Vanke, the nation's biggest publicly traded property developer, slumped 9.4 per cent to 15.31 yuan. China Merchants Bank Co, the third largest lender, lost 6.9 percent to 17.17 yuan. Citic Securities Co, the country's biggest brokerage, dropped 7.2 per cent to 34.96 yuan.

US
US stock and index futures fell before a report that will probably show economic growth accelerated last quarter. The Federal Reserve is expected to keep interest rates unchanged today and signal inflation remains its main concern.

Standard & Poor's 500 Index futures expiring in March lost 4 to 1430 as of 10:04 am in London. Dow Jones Industrial Average futures decreased 27 to 12,533. Nasdaq-100 Index futures slid 5.25 to 1784.00.

Stocks in the US yesterday carried the S&P 500 to its first gain in four days, led by energy companies and Motorola, which became the target of billionaire Carl Icahn. Fed policy makers are seen leaving their benchmark rate at 5.25 per cent and will discuss inflation in a statement today.

Europe
European stocks fell for the first time in three days after British Sky Broadcasting Group, the broadcaster chaired by Rupert Murdoch, reported a slide in earnings and sales at Bulgari missed analysts' estimates.

Groupe Danone, the world's biggest yogurt maker, slipped after Bear Stearns Co cut a recommendation on the stock, citing concerns about slowing growth. The Dow Jones Stoxx 600 Index fell 0.2 per cent to 373.93 as of 8:55 am in London.

The Stoxx 50 slipped 0.1 per cent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, dropped 0.2 per cent.

Corus Group surged after Tata Steel offered 6.2 billion pounds ($12 billion) in cash for the UK steelmaker. Statoil and BG group led energy stocks higher after oil had the biggest gain in 16 months in New York yesterday.

Swiss stocks declined, led by Julius Baer Holding after Dresdner Kleinwort advised investors to trim holdings in the country's third-largest asset manager. ABB and Synthes also helped pace the drop.

The Swiss Market Index of the 25 largest and most actively traded companies lost 21.07, or 0.2 per cent, to 9125.93 as of 10:22 am in Zurich. The broader Swiss Performance Index slid 14.34, or 0.2 per cent, to 7227.91.