Asian stocks fell for the first time in three days, as commodity prices declined and a weaker dollar reduced Japanese automakers' overseas earnings prospects.

Hong Kong stocks fell, led by China? related shares, after the country's commerce ministry said the nation's efforts to boost domestic demand can't completely offset a "huge" export slump. U. S. stocks dropped the most in a month, led by financials, after JPMorgan Chase & Co. said credit losses may overwhelm capital at MBIA Inc. and analyst Dick Bove said bank earnings won't improve in the second half of the year.

Equities fell even after productivity of U. S. workers grew in the second quarter at the fastest pace in almost six years as employers squeezed more out of remaining staff to bolster profits. Productivity rose at an annual 6.4 percent pace, more than forecast, after a 0.3 percent gain the prior three months, Labor Department data showed. Labor costs fell 5.8 percent, the most in eight years.

A separate government report showed inventories at U. S. wholesalers fell in June for a tenth straight month as a gain in sales helped distributors move out more of their excess supply. The Federal Open Market Committee will release a statement tomorrow following a two? day meeting to discuss interest rates and its asset? purchase program. The key lending rate will remain between zero and 0.25 percent, according to all 45 economists surveyed by Bloomberg.

Earnings per share topped analysts' estimates by 10 percent on average for the 450 companies in the S&P 500 that released results since June 17, according to data compiled by Bloomberg. Profits slumped 30 percent in the period, a record eighth straight quarter of falling earnings, and sales slid 16 percent.

The S&P 500 has fallen for two days after it erased 38.2 percent of its tumble from a record in October 2007, a "Fibonacci retracement" to forecasters who base predictions on price charts.

The U. K. housing market improved in July as the biggest proportion of real? estate agents and surveyors in two years saw increases in home values, the Royal Institution of Chartered Surveyors said.

Today IIP data and Inflation data is expected in India. The IIP for the month of Jun is expected at 3.8% as compared to 2.7% for the month of May. The inflation is expected at ?1.74%.