Most Asian stocks declined and the dollar fell on concern China will further raise interest rates and before the release of U.S. data that may show that housing remains a weak link amid a strengthening economic recovery. About four stocks slid for every three that rose on the MSCI Asia Pacific Index, which added 0.2 percent to 135.71 as of 3 p.m. in Tokyo. Benchmark indexes in Hong Kong and Shanghai dropped at least 0.9 percent. Standard & Poor’s 500 Index futures were little changed. The dollar weakened against 15 of its 16 major counterparts and sank 0.5 percent to $1.3233 per euro. Copper climbed as much as 0.6 percent to a record $4.3075 a pound in New York, while oil was near a two-year high. The Shanghai Composite Index is extending its longest losing streak since July as People’s Bank of China adviser Li Daokui said in a newspaper interview that adjustments in rates and reserve requirements are “very necessary” in 2011. Data today may show U.S. home prices fell in October while consumer confidence improved this month. “The global economy is recovering, but as a backdrop there’s the China overheating concern because it’s still unable to be controlled,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. China Resources Land Ltd. fell 3.6 percent, pacing a 0.9 percent decline in the Hang Seng Index as Hong Kong’s stock market reopened after a holiday. The Shanghai Composite slid 1.1 percent, adding to a 1.9 percent drop yesterday after the People’s Bank of China boosted its key one-year lending and deposit rates by 25 basis points over the weekend. Inflation, Rates Consumer prices in the nation may rise more than 5.5 percent in January, the 21st Century Business Herald reported, citing Liu Yuhui, a researcher. The newspaper also cited Li Daokui as saying more adjustments in China’s deposit rate, lending rate, and reserve requirement ratio are “very necessary” in 2011, especially in the first half. In Japan, Mizuho Financial Group Inc. rose 1.3 percent after saying it will exceed international capital requirements without selling shares. GS Engineering & Construction Corp. surged 9.6 percent after South Korea’s land ministry announced plans to support the building industry. The Dollar Index, which tracks the U.S. currency against those of six trading partners, fell 0.5 percent, extending a three-day retreat. The currency was set for its biggest drop in two weeks against the euro and fell to 82.45 yen from 82.81 yen. Home Prices The S&P/Case-Shiller Index of property values dropped 0.2 percent in October from a year earlier, the first decline since January, according to the median estimate of economists surveyed by Bloomberg News before the data today. The Conference Board’s U.S. consumer confidence index increased to 56.4 this month from 54.1 in November, according to a separate survey. Japan’s 10-year bonds rose, snapping a two-day decline after data today showed consumer prices excluding fresh food declined 0.5 percent from a year earlier while the unemployment rate held steady at 5.1 percent. A separate report showed factory output climbed 1 percent from October, increasing for the first time in six months. “Today’s economic data was overall good and it affirmed that the economy is recovering,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “It’s important to keep taking appropriate measures to combat deflation in order to attract investment to Japan.” Copper, Oil Copper for March-delivery traded at $4.288 a pound on the Comex in New York after earlier reaching the highest price ever for a most-active contract. Soybeans gained as much as 0.7 percent to a 28-month high of $13.94 a bushel on the Chicago Board of Trade, fueled by concern dry weather in Argentina will spread to parts of Brazil, hurting crops in the world’s largest exporters after the U.S. Oil rose as much as 0.4 percent to $91.34 a barrel in New York, retracing some of yesterday’s 0.6 percent pullback before an Energy Department report this week that will show U.S. inventories dropped for a fourth week, the longest stretch of declines in a year, a Bloomberg News survey showed. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

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