By Adam Haigh Dec. 16 (Bloomberg) -- European and Asian stocks fell as concern the economic contraction will drag down profits at commodity producers overshadowed speculation the Federal Reserve will slash interest rates to the lowest level on record. U.S. index futures declined. BHP Billiton Ltd. and Rio Tinto Group lost more than 2 percent as metals prices decreased. Ericsson AB dropped 1.3 percent after Deutsche Bank AG advised clients to sell shares of the world’s largest maker of wireless networks. The U.S. Fed’s Open Market Committee will probably cut the benchmark rate in half, to 0.5 percent, according to the median of forecasts in a Bloomberg News survey. The central bank may also signal plans to channel credit to businesses and consumers by further enlarging its $2.26 trillion of assets. The FOMC, which began meeting yesterday, is expected to release its statement around 2:15 p.m. in Washington. Europe’s Dow Jones Euro Stoxx 600 Index retreated 0.1 percent to 197.36 at 8:10 a.m. in London. The MSCI Asia Pacific Index lost 1 percent, as concern the deepening global recession will stifle earnings sent commodity producers and electronics makers lower. Futures on the Standard & Poor’s 500 Index slipped 0.4 percent. The Stoxx 600 has rebounded 8.4 percent from a five-year low on Nov. 21 as governments and policy makers around the world announced packages to revive economic growth. U.S. President- elect Barack Obama said he is planning the most extensive public-works spending package since the 1950s. BHP Billiton, the world’s largest mining company, lost 2.5 percent to 1,229 pence, while Rio Tinto, the third-biggest, slipped 3.4 percent to 1,488 pence. HSBC, Ericsson HSBC Holdings Plc lost 1.7 percent to 711.5 pence after CLSA Asia-Pacific Markets said Europe’s largest bank may seek to raise about $14 billion as increasing bad-loan provisions erode profit. Ericsson dropped 1.3 percent to 58.70 kronor after being cut to “sell” from “hold” at Deutsche Bank, which also reduced its stock-price estimate by 25 percent to 45 kronor. Ericsson “will not remain insulated from deteriorating macroeconomics in 2009,” Helsinki-based analyst Jussi Uskola wrote in a note to clients. “Given rapidly falling demand, we expect the company to face difficulties in Sony Ericsson’s turnaround plans,” Uskola said. To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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