Chips, metals hit a high

GLOBAL MARKETS

Asian stocks climbed for a sixth day, buoyed by rising prices of computer chips and metals. China's CSI 300 Index tumbled on concern new share sales will drain as much as $40 billion from the market.

Samsung Electronics, the world's biggest computer memory maker, jumped after Citigroup said it expected some chip prices to rise. BHP Billiton advanced after prices of copper and lead rose.

"Global growth is continuing to be very strong,'' said Sean Fenton, who helps manage $832 million at Jenkins Investment Management in Sydney. "We expect it to be supportive of resources shares for some years to come.''

The Morgan Stanley Capital International Asia-Pacific Index gained 0.5 per cent to 156.67 in Tokyo, set for a record. China Petroleum & Chemical Corporation led China's benchmark down 5.5 per cent to its lowest in a month.

Japan's Nikkei 225 Stock Average rose 0.3 per cent. Other markets advanced, except in Singapore, Malaysia, Thailand, India, Sri Lanka and New Zealand.

Europe

European stocks fell for the first time in three days, led by phone companies and utilities, on concerns that central banks will signal further interest-rate increases.

Vodafone Group, the world's largest mobile-phone company, and Iberdrola, Spain's second-biggest power company, paced the decline. Deutsche Telekom dropped after a report that Europe's largest phone company is struggling to find a partner for its T-Systems computing-services division.

The European Central Bank will probably keep interest rates unchanged today, waiting for confirmation that economic growth is stoking inflation before raising again, a survey of economists shows. The Bank of England will probably raise its benchmark rate by a quarter-point to 5.75 per cent.

"While today's outcome is widely anticipated, robust economic growth and higher inflation have generated concerns that further rate increases might be on the cards,'' said Boris Boehm, a fund manager at Nordinvest in Hamburg, which oversees about $7 billion.

US

US stock- index futures were little changed before reports that may provide evidence on the strength of the economy and the outlook for interest rates.

Shares of Hilton Hotels Corporation traded in Germany above their July 3 close after the second-biggest US hotel chain agreed to a $20 billion buyout. Huntsman Corp jumped after Apollo Management offered $6.35 billion for the chemical maker.

General Motors Corp fell after the carmaker reported a decline in US sales and Bear, Stearns & Co downgraded the stock.

"Investors are very much focused on inflation on the one hand and on the other wanting to see that the economy is not being destabilized by the weakness in the US housing market,'' said Terry Ewing, who helps manage $130 billion at Resolution Asset Management in Glasgow. "They want to see that the economy is not too hot and not too cold.''

Standard & Poor's 500 Index futures expiring in September added 1.3 to 1537.5 in London. Dow Jones Industrial Average futures gained 7 to 13,672 and Nasdaq-100 Index futures rose 2.25 to 1987.25.

US markets were closed yesterday for Independence Day.