Asia Stocks, Commodities Drop on Fed, U.S. Retail Sales, China

July 15 (Bloomberg) -- Asian stocks declined from a three- week high and commodities fell, after the Federal Reserve cut its growth forecast, U.S. retail sales declined and China’s economic growth eased.

The MSCI Asia Pacific Index lost 0.5 percent to 117.15 at 11:37 a.m. in Tokyo. The yield on Korean government bonds slipped from a four-month high. Copper fell 1.4 percent and crude oil slid 0.5 percent. Standard & Poor’s 500 Index futures rose 0.5 percent after the index was little changed yesterday.

The Federal Reserve cut its central forecast for growth this year to a range of 3-to-3.5 percent from 3.2-to-3.7 percent, and sales at U.S. retailers dropped for a second month, falling more than economists estimated. Economic growth in China eased to 11.1 percent in the first half from 11.9 percent in January- March after the government succeeded in tempering credit, investment spending and property speculation.

“It’s hard to eliminate concerns about the future,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “However, shares have significant upside potential in terms of valuations.”

Two shares fell for every one that gained on the MSCI Asia Pacific Index, which rallied 1.5 percent yesterday to its highest since June 22 after Intel Corp. reported record second- quarter sales and Singapore raised its growth forecast.

Japan’s Nikkei 225 Stock Average dropped 1.1 percent. Mitsubishi Corp., Japan’s biggest commodities trading company, retreated 1. percent in Tokyo.

The Federal Reserve report derailed a six-day rally in U.S. stocks after better-than-estimated profits from Intel Corp. and Alcoa Inc. boosted shares. JPMorgan Chase & Co. and Google Inc. are scheduled to report earnings later today

“The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside,” the Fed said in its minutes. “The changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place.”