Stocks, commodities drop as China growth slows; Treasuries gain

March 20 (Bloomberg) -- Stocks and commodities declined after China raised fuel prices by the most in two years and BHP Billiton Ltd. said the nation’s steel production is slowing. Treasuries advanced for the first time in 10 days.

The MSCI All-Country World Index fell 0.6% at 12:35 p.m. in London, retreating for the first time in four days, and Standard & Poor’s 500 Index futures slipped 0.5%. The S&P GSCI commodities gauge declined 1%. The yield on the 10-year Treasury dropped three basis points to 2.35% and the dollar gained against all but one of its most-traded peers.

China, the world’s biggest energy consumer and steelmaker, is raising fuel prices for the second time in less than six weeks. The nation’s vehicle sales may miss industry forecasts this year as economic growth slows, an official from the China Association of Automobile Manufacturers said. U.S. housing starts fell in February from a three-year high, the Commerce Department said today.

“There will be some sort of slowdown coming out of China and the Asian economies,” said Tim Price, who helps oversee more than $1.5 billion of assets at PFP Group LLP in London. “It can definitely take the heat out of the commodities markets.”

The Stoxx Europe 600 Index fell 1% as Bayerische Motoren Werke AG and Daimler AG slid 4.7%, leading a gauge of automakers to the biggest drop in two weeks.

Mercedes Deals

Mercedes dealers are offering record markdowns of 25% on high-end models such as the S300 sedan, according to data stretching back to 2009 at, which tracks prices at more than 3,000 Chinese dealerships. BMW’s 7-series and Audi AG’s A8Ls sell for 20% below sticker prices, waiting lists have vanished and salesmen are dangling perks ranging from free iPhones to Hermes-bag coupons.

DKSH Holding Ltd., a company that helps clients expand in Asian markets, jumped as much as 9% as the shares started trading in Zurich following an 821 million-Swiss-franc ($900 million) initial public offering.

The drop in S&P 500 futures indicated the U.S. equities gauge will decline from the highest level since May 2008.

Oil fell for the first time in three days in New York, retreating 0.6% to $107.49 a barrel. Silver dropped 1.9% to $32.3275 an ounce and gold slid 1% to $1,648.72 an ounce.

Credit default swaps linked to China rose 8.5 basis points to 105.5 basis points, climbing from the lowest level in almost a year, according to CMA in London.

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