By Stuart Wallace Dec. 30 (Bloomberg) -- The MSCI World Index of stocks fell for the first time in three days, led by commodity companies, the best-performing industry this year. Currencies of raw- material producers weakened. The World Index of 23 developed nations dropped 0.5 percent at 11:40 a.m. in London, with the commodities group retreating 0.9 percent. The MSCI Asia Pacific Index slipped 0.5 percent, as did Standard & Poor’s 500 Index futures. The Canadian dollar, known as the loonie, declined against 16 of its most-traded counterparts and the Australian dollar fell against 11. China led world economies out of recession this year, and the nation’s demand for raw materials spurred a 50 percent gain in the S&P GSCI index of 24 commodities, the best performance in almost four decades. Valuations on commodity stocks rose to a record, with the World Index’s materials group trading at 81 times earnings, according to data compiled by Bloomberg. “After strong gains over the past year, there’s a propensity to lock in profits and reposition for 2010,” said Mark Pervan, a senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. Europe’s Dow Jones Stoxx 600 Index declined 0.7 percent. Basilea Pharmaceutica Ltd. slumped as much as 28 percent, the most in 10 months, after the U.S. Food and Drug Administration rejected the Swiss biotechnology company’s experimental antibiotic for skin infections. The index, which will be calculated for the last time this year today, is heading for a 27 percent annual gain, the biggest in 10 years. Japan, Russia The MSCI Asia Pacific Index dropped as Japan Airlines Corp. tumbled to a record low in Tokyo on speculation the carrier will file for bankruptcy. Asia’s biggest airline by sales fell 24 percent as Japan’s Cabinet met to discuss the airline’s future. Equity indexes of commodity-producing nations fell, with South Africa’s FTSE/JSE Africa All Share Index sliding 1.1 percent, Kazakhstan’s KASE Index down by the same amount and Russia’s Micex Index losing 0.8 percent. Futures trading indicated the Standard & Poor’s 500 Index will decline for a second day. The Institute for Supply Management-Chicago Inc. business barometer, due at 9:45 a.m. in New York, may have eased to 55.1 from a one-year high of 56.1 in November, according to the median estimate of 53 economists surveyed by Bloomberg News. Readings above 50 signal expansion. Dollar Rises The dollar rose 0.3 percent to 92.26 yen, after climbing to a two-month high of 92.28 yen. The U.S. currency advanced 0.2 percent to $1.4327 per euro, on course for its first monthly gain since June. The Canadian dollar fell 0.6 percent to C$1.0495 per U.S. dollar and the Australian dollar declined 0.3 percent to 89.25 U.S. cents. Copper for delivery in three months rose 0.6 percent to $7,319 a metric ton on the London Metal Exchange, advancing for a fourth session and extending this year’s advance to 138 percent. Palladium for immediate delivery rose 2.2 percent to $395.45 an ounce, the most since July 2008, and crude oil for February fell 0.2 percent to $78.75 a barrel. Treasuries were little changed, with the yield on the 10- year note at 3.80 percent. The U.S. is scheduled to sell $32 billion of seven-year debt today, the last of three auctions this week totaling $118 billion. The government sold a record- tying $42 billion of five-year securities yesterday and $44 billion in two-year notes on Dec. 28. U.S. government securities have fallen 3.6 percent this year, according to Bank of America Merrill Lynch indexes, the worst annual performance since at least 1978, when Merrill began collecting the data. To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

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