Stocks and U.S. index futures fell after China told banks to set aside more reserves as the government tries to curb inflation. The euro and bonds of the region’s most-indebted nations gained for a third day as Ireland indicated it’s ready to accept aid. The Stoxx Europe 600 Index sank 0.9 percent at 6:25 a.m. in New York. Futures on the Standard & Poor’s 500 Index lost 0.4 percent. The euro appreciated 0.6 percent to $1.3722. The 10- year Irish bond yield dropped 11 basis points to 8.20 percent, with the yield on the similar-maturity Portuguese security falling five basis points to 6.87 percent. The People’s Bank of China said it will increase the ratio requirement for the nation’s banks by 50 basis points from Nov. 29, according to its website. Optimism that a European Union bailout for Ireland will limit contagion across Europe’s larger debt markets has helped drive the euro higher this week. Federal Reserve Chairman Ben S. Bernanke defended his monetary stimulus, saying it will aid the world economy, based on remarks for today’s central bank conference in Frankfurt. “China is tackling its problem of inflation stemming from large money inflows,” said David Macia, a money manager for Credit Andorra’s asset management unit in Andorra, which oversees about $6 billion. “This is not unique to China, but to the whole emerging world. They are trying to control prices and they will slow down the current engine of growth in the world.” More than two stocks fell for every one that rose on the Stoxx 600. Banco Santander SA lost 2.5 percent and Rio Tinto Group slid 2.3 percent. Zodiac Aerospace SA slumped 5 percent after Safran SA said it has decided not to bid for the company. Corio NV slipped 1.5 percent as Morgan Stanley downgraded the property developer. Dell Earnings The decline in U.S. futures indicated the S&P 500 may pare some of yesterday’s 1.5 percent rally, the biggest gain in two weeks. Dell Inc., the world’s third-largest supplier of personal computers, jumped 4.4 percent in pre-market trading after reporting earnings that beat analysts’ estimates. The MSCI Emerging Markets Index climbed 0.2 percent, paring gains after China’s said it would boost banks’ reserve ratio. Poland’s WGI20 Index extended declines, dropping 0.9 percent. Russia’s Micex slipped 0.4 percent, reversing earlier gains. China’s Shanghai Composite Index advanced 0.8 percent before the announcement. The gauge retreated 3.2 percent this week as concern deepened that the government will tighten monetary policy to curb the fastest inflation in two years. China’s central bank will raise its benchmark lending rate by the end of December, according to analysts at nine banks surveyed this week by Bloomberg News. Euro, Bonds The euro appreciated against all but three of its most- traded counterparts, advancing 0.3 percent to 114.23 yen. The Dollar Index, which tracks the U.S. currency against those of six trading partners, dropped 0.5 percent to 78.22, falling for the third consecutive day. The extra yield that investors demand to hold Irish 10-year debt instead of benchmark German bunds decreased three basis points to 537 basis points, down from an all-time high of 652 basis points last week. The gap between Portuguese bonds and bunds rose five basis points to 409 basis points, after soaring to a euro-era record of 484 basis points on Nov. 11. “There is no doubt that a deal on a financial aid package for Ireland will be reached, possibly at some stage over the next week, and this has helped turn euro sentiment more favorable,” Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in a report today. ‘Robust Growth’ The 10-year U.S. Treasury yield declined three basis points to 2.87 percent. The yield on the two-year Treasury note slipped one basis point to 0.49 percent. The best way to underpin the dollar and support the global recovery “is through policies that lead to a resumption of robust growth in a context of price stability in the United States,” Bernanke said. Countries that undervalue their currencies may eventually inhibit growth around the world and risk financial instability at home, he said. The Fed is scheduled to buy $1.5 billion to $2.5 billion of government debt maturing from August 2028 to November 2040 today as part of its so-called quantitative-easing plan. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net

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