Asian stocks fell and the yen strengthened after China said it will maintain lending curbs and Infosys Technologies Ltd. posted lower first-quarter profit. Chinese shares sank the most in two weeks. The MSCI Asia Pacific Index slid 0.5 percent to 115.42 at 3:17 p.m. in Tokyo. U.S. stock futures erased gains while those for the Euro Stoxx 50 increased 0.3 percent. Japan’s currency reversed an early drop. Copper and oil declined for a second day. Chinese developers and lenders led the nation’s shares lower after the government said it will “strictly enforce” policies enacted to quash real estate speculation. Infosys, India’s second-largest software services provider, reported profit that fell short of analyst estimates, sending its shares down the most in five months. The results outweighed better- than-expected earnings from Alcoa Inc. “Today’s comments on property loan rules put to rest speculation about a possible reversal of the tightening policy,” said Takashi Kudo, general manager of market information at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. “A sharp sell-off of Shanghai stocks in the wake of such remarks weakened risk sentiment to an extent.” China’s Shanghai Composite Index sank 1.6 percent, the most since June 29, coming off a 3.7 percent gain last week. The MSCI Asia has slumped 10 percent from its high this year on April 15 as Europe’s debt crisis and Chinese measures to curb property prices fueled concern the global recovery will falter. The index now trades at 14 times estimated earnings, compared with about 13 times for the Standard & Poor’s 500 Index in the U.S. Futures on the S&P 500 decreased 0.3 percent. China Real Estate China Vanke Co., the nation’s biggest publicly listed developer, dropped 2.2 percent, leading real estate stocks lower. “The government isn’t likely to relax tightening measures as it wants to transform the country’s growth model to focus on consumption rather than investment,” said Zhang Qi, an analyst at Haitong Securities Co. in Shanghai. Infosys fell 3.1 percent, the most since Feb. 5, after India’s second-largest software services provider reported profit that fell short of analyst expectations. Net income fell 2.6 percent to 14.9 billion rupees ($318.5 million) in the three months ended June 30, compared with the 15.6 billion rupee average of 25 analyst estimates compiled by Bloomberg. The yen was at 88.59 per dollar in Tokyo from 88.62 in New York yesterday when it reached 89.16, the weakest since June 29. The Japanese currency was at 111.42 per euro from 111.62 yesterday. The euro changed hands at $1.2578 from $1.2596. Copper Dips Copper for three-month delivery decreased 0.4 percent to $6,602 a metric ton on the London Metal Exchange. Crude oil fell in New York, erasing earlier gains to drop 0.5 percent to $74.59 a barrel in electronic trading, after the decline in Chinese equities reduced the investment appeal of commodities. “In the short term, there’s lot of headwinds against oil to move significantly above the marginal cost, which we see at $70 a barrel,” said Neil Beveridge, an analyst at Sanford C. Bernstein Ltd. in a Bloomberg Television interview in Hong Kong. “In the medium term, we see oil moving back to $100.” The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 2 basis points to 128 basis points in Hong Kong, according to Barclays Plc. That’s the lowest since June 22, according to CMA DataVision in New York. The Markit iTraxx Australia index decreased 2 basis points to 124 basis points in Sydney, the lowest since July 9, according to Nomura Holdings Inc. and CMA prices. The Markit iTraxx Japan index was little changed at 129 basis points in Tokyo, Morgan Stanley prices show. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. Alcoa Earnings Alcoa, the biggest U.S aluminum producer, started the U.S. earnings season with profits that topped analyst estimates, sending its shares up as much as 3.5 percent in extended trading. A total of 23 companies in the S&P 500, including Google Inc. and Citigroup Inc., will post results this week. Profits for S&P 500 companies are projected to have increased 34 percent in the April-June period and then to rise by the same amount in 2010, according to estimates compiled by Bloomberg. To contact the reporter for this story: Rocky Swift in Tokyo at rswift5@bloomberg.net

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