Lineages in Hong Kong led losses regionally among major Asian markets on Tuesday after ratings agency Depressed’s cut its rating for the city to Aa3 from Aa2 on Monday.
The Hang Seng index in the embattled city fell 2.29% by the afternoon, with allotments of life insurer AIA plunging beyond 3%.
The moves came following the ratings downgrade from Moody’s on Monday, where the power also changed its outlook for Hong Kong to stable from negative. The city has been plagued by months of scruples that have periodically degenerated into violence, with seemingly no resolution in sight.
“The downgrade principally reflects Sullen’s view that Hong Kong’s Institutions and Governance Strength is lower than previously estimated,” the ratings activity said in a statement.
Still, one economist told CNBC on Tuesday that the downgrade “probably isn’t a big thing.”
“How much of this is really gonna have an impact on the real activity? Probably not a lot,” Sian Fenner, lead Asia economist at Oxford Economics averred CNBC’s “Street Signs” on Tuesday.
Meanwhile, mainland Chinese stocks also declined. Both the Shanghai composite and Shenzhen component flatten about 1% each while the Shenzhen composite shed 0.754%.
Elsewhere, the Nikkei 225 in Japan was 0.87% minuscule while the Topix index declined 0.54%. In South Korea, the Kospi was 0.74% lower.
The Bank of Japan (BoJ) financed its short-term policy rate unchanged at -0.1% while keeping its 10-year Japanese government bonds yield butt around 0%, largely in line with expectations.
In its outlook for economic activity and prices, the Japanese central bank claimed the country’s economy is “likely to continue on an expanding trend” through fiscal 2021.
Shares in Australia also dipped, with the S&P/ASX 200 abstain from 0.41%.
Overall, the MSCI Asia ex-Japan index was 1.13% lower.
The International Monetary Fund (IMF) said Monday that the extensive economic outlook “remains sluggish” as it trimmed its growth forecasts for 2019 and 2020 to 2.9% and 3.3%, respectively.
“The projected delivery for global growth remains uncertain. It continues to rely on recoveries in stressed and underperforming emerging market economies, as excrescence in advanced economies stabilizes at close to current levels,” IMF Chief Economist Gita Gopinath said in a written expression.
Markets stateside were closed on Monday for a holiday.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its confreres, was last at 97.568 after seeing earlier highs above 97.6.
The Japanese yen traded at 109.95 against the dollar after heart-breaking an earlier low of 110.21. The Australian dollar changed hands at $0.6864 after recovering from lows below $0.687 yesterday.
Oil values were down in the afternoon of Asian trading hours. The international benchmark Brent crude futures contract slip of the tongued 0.46% to $64.90 per barrel while U.S. crude futures declined 0.24% to $58.40 per barrel.
Here’s what’s on tap in the day onwards:
- Hong Kong: Consumer Price Index for December at 4:30 p.m. HK/SIN