FOREX UPDATE

U.S. stocks retreated, pushing the S&P 500 index down the most in six weeks, as investors speculated the global economy isn’t expanding fast enough to justify the steepest equity market rally in seven decades.

U.S. stocks staged their fastest advance since the Great Depression after falling to a 12?year low on March 9, rising as much as 50% over five months on signs the global recession is easing. Speculation that growth in China would spur demand for raw materials helped send the Reuters Jefferies/CRB Commodity Price Index up 32%.

China’s Shanghai Composite Index sank 5.8 % yesterday, the steepest slump since Nov. 18, after Ping An Insurance (Group) Co. reported profit that trailed projections and the government reported a 10th straight monthly decline in foreign investment. Yunnan Copper Industry Co. said there are “no clear signs” of a recovery after posting a first?half loss.

Commodity producers retreated as investors speculated that a rally in riskier assets has outpaced prospects for economic growth. The CRB index of 19 raw materials fell 1.6 %.

China’s benchmark stock index, the world’s worst performer this month, may fall another 10 % as bank lending slows, said Andy Xie, a former Morgan Stanley chief Asian economist.

“The current correction is reflecting the tightening in lending,” said Xie, who correctly predicted in April 2007 that China’s equities would tumble. “We’ve seen the peak of this market cycle, though there’s likely to be a bounce as the government seeks to stabilize the market.”

Today morning Most Asian stocks fell, led by commodity companies, after metals prices slumped amid concern the global economic recovery will fail to meet investors’ expectations. A measure of six metals, including copper and zinc, traded on the London Metal Exchange fell 2.7 % yesterday to the lowest level in a week. Copper futures in New York dropped 2.3 %, while oil sank 1.1 %.

a weather bureau official said that revival in India’s monsoon rains is helping ease dry weather that’s caused drought in a third of the nation’s districts and dented sowing of rice and sugar cane. Uttar Pradesh, the country’s biggest cane grower, Madhya Pradesh, the largest soybeans producer, and Bihar, a top grower of rice and corn, received “good rain” over the past few days, said Ajit Tyagi, director general of the India Meteorological Department, from New Delhi today. Monsoon rain may be similar to 2002, when showers were 19.2 % below average and the nation faced its worst drought in 12 years, Tyagi said last week.