Asian stocks fell, extending two weeks of declines, after an index of U. S. consumer sentiment sank and on concern a China? Taiwan trade agreement will be delayed.

Japan's opposition party, leading in polls two months ahead of elections, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds. China, India, Brazil, Mexico and South Africa last week challenged the U. S. dollar as the primary denomination of world reserves.

China's stocks sank for a second day after exports from the world's third? largest economy slumped for an eighth month in June, and on concern new share sales will divert funds from existing equities.

Exports slid 21.4 percent in June from a year earlier, the customs bureau said on July 10 after the market closed, following a record
26.4 percent drop in May. China State Construction Engineering Corp. is planning an initial share sale in Shanghai to help fund projects worth a combined 40.5 billion yuan.

Retail sales in the U. S. probably increased in June for a second straight month and factory production fell at a slower pace as the recession abated, economists said before reports this week.

Sales gained 0.4 percent after a 0.5 percent increase in May, according to the median estimate in a Bloomberg News survey before the Commerce Department's report on July 14. The next day, Federal Reserve figures may show industrial output fell 0.6 percent last month after a 1.1 percent drop in May.

An index consumer confidence dropped last week on concerns about job losses, sending stocks lower. Car dealers struggled last month, as sales dropped to a 9.7 million annual pace from a 9.9 million rate in May, according to data from Autodata Corp.

Treasury Secretary Timothy Geithner said that while the pace of decline in the U. S. economy has "slowed dramatically," there are still "enormous challenges." Geithner also said it was too soon to determine whether a second economic stimulus package is needed. Lloyds Banking Group Plc may announce further losses of as much as
13 billion pounds ($21 billion), the Sunday Times reported, without saying where it got the information. Lloyd will reveal the losses in its first? half results scheduled to be reported in three weeks.

Indian Stock markets are expected to open lower and may continue to trade lower during the day.