March 15 (Bloomberg) -- Stocks retreated, led by emerging markets, and commodities declined on concern that China and India will seek to restrict economic growth to curb inflation. The pound and the euro weakened against the dollar. The Standard & Poor’s 500 Index, which closed at a 17-month high on March 11, lost 0.3 percent to 1,146.05 at 10:12 a.m. in New York. The MSCI Emerging Markets Index slipped 0.8 percent as the Shanghai Composite Index plunged 1.2 percent. The pound weakened against all 16 of its most-traded counterparts and the euro snapped three days of gains versus the dollar. Oil, copper, lead and nickel lost at least 1 percent. Treasury 10-year note yields were near a one-week low of 3.7 percent. Premier Wen Jiabao may take steps to cool China’s expansion and economists predict India will raise interest rates after inflation in both nations accelerated to a 16-month high. European finance ministers meet in Brussels today to discuss how to help Greece overcome its debt crisis. The U.S. Federal Reserve will detail its outlook for interest rates tomorrow. “China is between a rock and a hard place” because of the need to control inflation without hurting the recovery, Mikio Kumada, a senior market analyst at LGT Capital Management in Singapore, said in an interview on Bloomberg Television. U.S. equities retreated even after reports showed U.S. industrial production unexpectedly grew 0.1 percent in February and manufacturing in the New York region increased for an eight straight month. Declines were limited as Wal-Mart Stores Inc. climbed 2.2 percent after Citigroup Inc. recommended the shares, while PepsiCo Inc. jumped 1.5 percent on plans to boost its dividend and buy back up to $15 billion in shares. Dollar Gains The Dollar Index, which tracks the currency against those of six U.S. trading partners, ended three days of declines, rising 0.4 percent to 80.17. Futures trading shows wagers on the pound weakening against the dollar outnumber bets on a gain by eight times more than when George Soros made $1 billion on the U.K. currency’s decline in 1992. The U.S. and U.K. are “substantially” closer to losing their AAA credit ratings, with both nations spending about 7 percent of this year’s revenue on debt payments, Moody’s Investors Service said. Greece, which is trying to cut its budget deficit to 8.3 percent of gross domestic product this year from 12.7 percent last year, must repay bondholders more than 20 billion euros by the end of May. Pound, Gilts While the pound has tumbled 6.8 percent against the dollar in 2010, U.K. government bonds have gained, with the yield on the benchmark 10-year gilt falling 5 basis points to 4.04 percent today. The FTSE 100 Index of stocks has climbed 3.8 percent this year, more than the 3.1 percent increase in the S&P 500. Credit-default swaps on U.K. government debt rose almost 2 basis points to 69.2, advancing from a 3 1/2-month low of 67.5 reached on March 12, according to CMA DataVision. Contracts on Greece were little changed at 290.8 basis points. The MSCI Asia Pacific Index declined 0.5 percent. Newcrest Mining Ltd., Australia’s biggest gold producer, dropped 1.5 percent in Sydney. China Merchants Bank Co. sank 2.4 percent in Hong Kong trading after Morgan Stanley said it expects “multiple” increases in bank-reserve ratio requirements. ICICI Bank Ltd., India’s second-largest lender, declined 1.4 percent. Egypt’s EGX 30 Index dropped 3.1 percent, the steepest retreat among benchmark equity gauges worldwide. European Stocks The Stoxx Europe 600 Index fell 0.4 percent. BHP Billiton, the world’s largest mining company, paced a retreat in basic- resources shares, falling 1 percent in London. Deutsche Telekom AG, Europe’s biggest phone company, slid 1 percent in Frankfurt as BofA Merrill Lynch Global Research downgraded the shares to “underperform.” Copper for delivery in three months fell 1.2 percent $7,355 a metric ton on the London Metal Exchange, leading declines in industrial metals. Crude oil for April delivery was down 1.9 percent at $79.69 a barrel on the New York Mercantile Exchange. Analysts surveyed by Bloomberg expect the Organization of Petroleum Exporting Countries to keep production quotas unchanged at a meeting in Vienna in two days time. To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

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