Asian markets fell Wednesday (August 2nd) after rating agency Fitch downgraded the United States’ credit rating from AAA to AA+, citing “expected financial deterioration over the next three years”.
The Japanese Nikkei 225 index led the losses in the region, down by 2.3%, and closed at 32,707.69 points, while the Topix index also declined, by 1.52%, and closed at 2,301.76 points.
The Hang Seng Index in Hong Kong declined by 2.34%, mainly due to healthcare stocks. Mainland Chinese markets were also trading in the red, with the Shanghai Composite down -0.91%, and the Shenzhen Composite also down -0.49%.
Fitch said in its report: “Repeated political confrontations over debt and last-minute decisions have led to a decline in confidence in financial management.”
“In Fitch’s view, there has been a steady deterioration in governance standards over the past 20 years, including on financial and debt matters, despite the June agreement to suspend the debt ceiling until January 2025,” the ratings agency added.
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