Asian Shares Down on Italy’s Credit Rating Downgrade
Stocks and the euro fell again on Tuesday after Italy had its credit rating downgraded.
In Japan, the Nikkei 225 closed down 1.6%, with Standard & Poors’ surprise cut of Rome’s debt rating increasing fears of a full-blown global financial crisis.
The downgrade sent shares of major Japanese banks, like Mitsubishi UFJ and SMBC, down nearly 3%.
Japan’s biggest defense contractor, Mitsubishi Heavy Industries, also lost more than 3%, after the company said hackers had accessed its computer system.
Suzuki Motor climbed on a news report that alliance partner, Volkswagen, could take over the Japanese automaker.
Elsewhere in Asia, MSCI’s index of Asia Pacific shares continued to fall further into bear market territory, after having slid more than 20% over the last five months.
Hong Kong shares pared losses after falling 1%, while Australian stocks closed 1% down on weakening metal prices.
S&P’s Italy downgrade also hit the euro, which fell 0.5% during Asian trading.
The dollar firmed as investors sought safety in the U.S. currency, despite expectations of further easing steps by the Federal Reserve this week.
S&P 500 futures fell 0.8%, pointing to a weaker start on Wall Street.
U.S. stocks snapped a five-day rally on Monday, ending about 1% lower.
Bottom line: Asian stocks and the euro fall after ratings agency, S&P, downgrades Italy’s credit ratings in a move that took markets by surprise.