Asian stocks fell, dragging the benchmark index to an 11-week low, as commodities producers and traders declined along with rubber, corn, zinc and platinum.
Woodside Petroleum Ltd., Australia's second-largest oil explorer, slumped after higher Chinese fuel prices yesterday sent crude oil to its largest retreat in almost three months. BHP Billiton Ltd., the world's largest mining company, fell for a second day. China Petroleum & Chemical Corp. led Chinese share gains on optimism refining losses will narrow.
About half of Asia's benchmark indexes fell, including Japan's Nikkei 225 Stock Average, which dropped 1.3 percent to 13,942.08. China's CSI 300 Index jumped 2.8 percent. India's Sensitive Index fell as much as 2.6 percent after the nation's inflation rate accelerated to the fastest in 13 year


European stocks fell last week, sending the Dow Jones Stoxx 600 Index to a three-month low, as analysts forecast more losses at banks, carmakers said the market was deteriorating and oil jumped more than $4 a barrel.
UBS AG and Deutsche Bank AG declined for a third day as Lehman Brothers Holdings Inc. cut earnings estimates for the banks. HBOS Plc sank below the price of its rights offer after Standard & Poor's cut its credit outlook for the bank. Fiat SpA dropped to the lowest since 2006 after forecasting a ``disastrous'' car market in Italy. Porsche SE retreated for the first time in four days as crude climbed above $136.
National benchmark indexes decreased in all of the 16 western European markets that were open. The U.K.'s FTSE 100 slipped 1.5 percent. Germany's DAX lost 2.1 percent, while France's CAC 40 sank 1.8 percent.
UBS slid 3.3 percent to 23.08 francs. Deutsche Bank AG, Germany's biggest bank, lost 3.1 percent to 58.62 euros.
UBS may report $5.5 billion in second-quarter writedowns, related mostly to residential real estate and monoline exposure, leading to a net loss of 2.2 billion Swiss francs ($2.1 billion), London-based analysts Jon Peace and Chintan Joshi said in a note to clients today.
Deutsche Bank may write down 1.9 billion euros ($3 billion) in the quarter, they said.
Lehman now forecasts a loss per share of 4.17 francs at UBS this year, compared with an earlier estimate of 3.15 francs. The estimate for Deutsche Bank was lowered to 4.58 euros from 5 euros.
``We expect an extended period of revenue weakness for the investment banks,'' London-based analyst Jon Peace wrote in a note to clients.


U.S. stock indexes fell the most in a month last week as Fifth Third Bancorp's dividend cut and worse-than-estimated results from FedEx Corp. renewed concern that mortgage losses and a slowing economy will prolong the profit slump.

The stock market, and financials tanked on Tuesday despite Goldman's large beat. Ironically, the market sank when Goldman warned that U.S. banks may need to raise $65 billion in fresh capital in response to the subprime fallout. (U.S. financial companies have raised $159 billion so far).

Sure enough, the following day regional bank Fifth Third Bank (FITB) said it is going to raise $1 billion in fresh capital, sell $1 billion in assets and cut is dividend by 66% in an effort to shore up its balance sheet. Regional banks fell 9% for the week.

Citigroup compounded the financial sector's decline on Thursday, after announcing that it will face another barrage of write-downs in its second quarter, although the total amount should be less than its $19 billion first quarter write-down due decreased subprime exposure. Citi did note, however, that it will face a write-off on its bond insurer exposure similar to its first quarter amount ($1.5 billion), citing the widening in credit spreads of bond insurers -- which indicates the struggling bond insurers might not be able to pay claims on the assets they back up.

On a related note, Moody's cut its Aaa credit rating and put a negative outlook on the insurance units of both Ambac Financial (ABK) and MBIA (MBI ). Moody's lowered MBIA's unit by five notches and Ambac's unit by three notches, citing the difficulty the companies are having in writing new business and their limited ability to raise new capital.

Financials tumbled 4.7% for the week and is at its lowest level in five years.FedEx (FDX) fell 6% after reporting quarterly earnings that missed the consensus estimate. The Memphis, Tenn.-based company issued fiscal year 2009 earnings guidance well below expectations, citing sluggish U.S. demand and record energy prices.

The dollar posted its biggest weekly drop against the euro in almost three months on speculation the Federal Reserve will delay increasing interest rates to protect the U.S. economy.
The greenback dropped last week versus all of the other major currencies as Lehman Brothers Holdings Inc. said losses at Fannie Mae and Freddie Mac, the two largest U.S. mortgage- finance companies, may mount. The euro was headed for a sixth weekly advance against the yen, the longest stretch in more than a year, as German producer price inflation accelerated.
``The re-emergence of financial concern places a question mark on the Fed's ability to raise interest rates,'' said Matthew Strauss, a senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``The possibility of a revisit to $1.60 is still in the cards.''
The U.S. currency has fallen 1.5 percent against the euro in the week, its biggest drop since March 28. The dollar rose 2.5 percent last week, the most since 2005, and touched a one-month high of $1.5303 per euro after Fed Chairman Ben S. Bernanke said economic risk had faded, raising bets that the central bank would increase borrowing costs this year to slow inflation.
The dollar decreased 0.6 percent against the yen this week, while the euro increased 0.9 percent versus Japan's currency in the longest winning streak since May 2007.
The Australian and New Zealand dollars headed for weekly advances on speculation the countries will maintain their yield advantage over the U.S. The target lending rates of 7.25 percent in Australia and 8.25 percent in New Zealand compare with 2 percent in the U.S.
Futures on the Chicago Board of Trade showed a 10 percent chance the Fed will increase the target rate for overnight lending between banks by a quarter-percentage point on June 25, compared with 22 percent odds a week ago. The odds of an increase in August also fell.
Fannie Mae and Freddie Mac, the two largest sources of U.S. home loans, may post further losses in the second quarter as the housing market continues to deteriorate, Lehman said in a note to clients today. Moody's Investors Service stripped bond insurers MBIA Inc. and Ambac Financial Group Inc. of their Aaa ratings yesterday.
Crude oil for July delivery climbed 2.8 percent to $134.60 a barrel today as the weaker dollar made commodities more attractive as a currency hedge and the New York Times reported that Israel rehearsed for a potential bombing attack on nuclear targets in Iran. Oil reached a record $139.89 on June 16.
The correlation of the dollar versus the euro and oil prices is minus 0.93 for the past year, indicating they move in the opposite direction 93 percent of the time, according to Bloomberg calculations based on value changes.
German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in almost two years in May on energy costs. Prices for goods from newsprint to plastics increased 6 percent from a year earlier, the most since July 2006, the Federal Statistics Office in Wiesbaden said today.
European Central Bank President Jean-Claude Trichet said on June 5 that the bank may increase its 4 percent main refinancing rate by a quarter-percentage point next month.
``Monetary policy expectations will prevent any rapid declines in the euro versus the dollar and the yen,'' said Masafumi Yamamoto, head of foreign-ex