HONG KONG : Asian stocks and U.S. Treasury yields declined on Wednesday after ratings agency Fitch unexpectedly downgraded the United States’ top-tier sovereign credit rating.
MSCI’s broadest index of Asia-Pacific shares slid 1.9 per cent. Japan’s Nikkei dropped by 1.8 per cent, while Australian shares tumbled 2.3 per cent.
China’s mainland benchmark and Hong Kong’s fell by 0.9 per cent and 2.2 per cent, respectively, as some investors booked profits in the absence of concrete and forceful measures by Beijing to shore up a faltering economy.
Asian stocks were also weighed down by declines on Wall Street overnight. U.S. stock futures, the S&P 500 e-minis, pointed 0.2 per cent lower on Wednesday.
In early European trades, the pan-region Euro Stoxx 50 futures were down 0.7 per cent. German DAX futures and FTSE futures fell 0.8 per cent and 0.5 per cent respectively.
Fitch cut the United States by one notch to AA+ from AAA, citing fiscal deterioration, a decision announced after the Wall Street close on Tuesday.
U.S. 10-year Treasury yields declined by about 2 basis points to 4.025 per cent in Tokyo. [US/]
“Most of the Asia turmoil this morning and the Treasury yields move is triggered by the Fitch decision,” said Manishi Raychaudhuri, head of Asia Pacific equity research at BNP Paribas.Source: Reuters
