Exporters lead the fall

GLOBAL MARKETS

Asian stocks declined, led by exporters, after the yen strengthened and the Australian dollar traded near an 18-year high.

Toyota Motor Corp, the world's largest automaker by market value, and Melbourne-based CSL, which sells almost half of its blood products in the Americas, fell. The yen paced gains by 12 of the region's currencies against the euro and the dollar.

The Morgan Stanley Capital International Asia-Pacific Index slipped 0.1 per cent to 157.81 at 7:41 pm in Tokyo. Industry groups tracking automaker and technology shares were the biggest drags on the measure.

Japan's Nikkei 225 Stock Average slid 0.1 per cent from a seven-year high. Australia's S&P/ASX 200 Index fell 0.6 per cent after jumping to a record yesterday. Markets dropped elsewhere, except in Taiwan, Hong Kong, Indonesia, and Thailand, whose SET index gained 1.7 per cent, the most in the region.

Losses were limited after Goldman, Sachs & Co raised its share-price forecast for Mitsubishi Corp and four other Japanese trading houses. Industrial & Commercial Bank of China Ltd rose after the lender reported a surge in first-half profit.

Europe

European stocks dropped for the first time in three days after Home Depot, the world's largest home-improvement retailer, cut its profit forecast, reinforcing concern that the US housing market is dragging on the economy.

Wolseley and Taylor Wimpey led a decline by homebuilders. Siemens, Europe's biggest engineering company, and Volkswagen, the region's largest carmaker, also fell.

"We maintain that the overhang in the US housing market will keep pressure on spending throughout the second half of 2007, and the profit warning from Home Depot just confirms this,'' said Jane Coffey, head of equities at Royal London Asset Management, which oversees about $14 billion.

US

US stock-index futures dropped after Home Depot lowered its profit forecast because of the sale of a unit and the slump in the real-estate market.

General Motors, the world's biggest carmaker, and Ford Motor climbed after JPMorgan Chase upgraded its recommendation on the shares.

US stocks gained yesterday on share buybacks and speculation that second-quarter earnings will surpass analysts' estimates.

Analysts expect Standard & Poor's 500 Index companies to post 4.8 per cent profit growth for the second quarter, according to data compiled by Bloomberg. Earnings grew 10.3 per cent in the first quarter.

"Home Depot's statement is weighing on sentiment,'' said Werner Wittenhagen, who helps oversee the equivalent of $21billion at LBBW Asset Management in Stuttgart, Germany. "At the start of the earnings season there's a lot of nervousness.''

S&P 500 Index futures expiring in September lost 2.20 to 1540.30 in London. Dow Jones Industrial Average futures fell 23 to 13,717. Nasdaq-100 Index futures slid 5 to 2003.50.