Asian stocks dropped for the first time in five days and oil declined after manufacturing from Australia to China disappointed investors. The euro reversed losses after a report Italy’s Prime Minister Mario Monti said his country doesn’t need a bailout. The MSCI Asia Pacific Index (MXAP) lost 0.4 percent as of 7:13 a.m. in Tokyo, where the Nikkei 225 (NKY) Stock Average declined 0.6 percent amid disappointing earnings reports. Futures on the Euro Stoxx 50 Index slipped 0.2 percent, while those on the Standard & Poor’s 500 Index futures were little changed. Brent oil decreased 0.3 percent to $104.57 a barrel. The euro rose 0.1 percent to $1.2313 after dropping as much as 0.2 percent. South Korean exports slowed, Australian manufacturing fell to the lowest in three years and China’s purchasing manager’s index missed estimates. Komatsu Ltd. (6301) followed Hitachi Construction Machinery Co. and Sany Heavy Industry Co. in cutting profit forecasts amid slumping demand in China. While Italy’s economy may need support it doesn’t require a bailout, Finnish newspaper Helsingin Sanomat cited Monti as saying today. “Given that the Chinese economy hasn’t bottomed yet, next quarter’s earnings could be even worse,� said Norihiro Fujito, a Tokyo-based senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “It’s difficult to see a recovery by the end of this year.� The MSCI Asia Pacific Index retreated from a four-week high, with about five shares dropping for every four that rose. Mining and industrial companies led declines on the gauge, which is trading at 12 times estimated earnings, compared with 13.4 for the S&P’s 500 and 11.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. Central Banks The Federal Reserve is expected to forego another round of large-scale asset purchases at a meeting today in Washington, according to the median estimate of economists surveyed by Bloomberg. The European Central Bank will announce a policy decision tomorrow after ECB President Mario Draghi last week pledged to do “whatever it takes� to preserve the euro. Oil fell for a third day in London, the longest losing streak in more than a month, even after U.S. crude stockpiles shrank 11.6 million barrels last week, the most since September 2008, according to the American Petroleum Institute. The Nikkei 225 dropped for the first time in five days, during the biggest week of earnings this season. More than half of the gauge’s companies that have reported so far, and for which Bloomberg has analyst estimates, have missed projections. Komatsu, Honda Komatsu, the world’s second-biggest maker of construction equipment, fell as much as 10 percent in Tokyo, the most in more than 16 months, after reducing its profit forecast by 17 percent. Honda Motor Co. slid 5.7 percent after the automaker posted first-quarter earnings that missed analysts’ estimates on higher marketing costs in the U.S. and gains in the yen. The Shanghai Composite Index (SHCOMP) rose 0.7 percent from a three- year low after the official Xinhua News Agency yesterday reported the Communist Party’s Politburo said maintaining stable growth is still the top priority. The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong advanced 1 percent. The Purchasing Managers’ Index in China unexpectedly fell to 50.1 in July, the weakest in eight months, from 50.2 in June, a government report showed today. Fifty marks the dividing line between expansion and contraction. December-delivery corn gained 1.2 percent to $8.1525 a bushel on the Chicago Board of Trade, following the biggest monthly rally in more than two decades as the worst U.S. drought in half a century persists. Soybean futures rose 1 percent and wheat increased 0.8 percent. To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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