Asian stocks fall as Fitch downgrades US credit rating

Asia-Pacific stocks fell after Fitch downgraded the U.S. credit rating. Asia-Pacific stocks fell on Wednesday after ratings agency Fitch downgraded the U.S. credit rating to AA+ from AAA, citing “expected financial deterioration over the next three years.” That will trigger risk-off flows in Asia, meaning lower stocks and safe-haven buying of currencies such as the Japanese yen and Swiss franc and treasuries against riskier currencies such as the Australian and New Zealand dollars, IG markets analyst Tony Sycamore said. Japan’s Nikkei 225 index led the region with a 1.21% loss, while the Topix also lost 0.53%. South Korea’s Kospi fell 0.64% and the Kosdaq fell 0.72%. The country saw its July inflation rate hit a 25-month low of 2.3%. Meanwhile, Australia's S&P/ASX 200 fell 0.67 percent after the Reserve Bank of Australia kept its benchmark interest rate at 4.1 percent. Hong Kong's Hang Seng index lost 0.9 percent at the open, while mainland Chinese markets were trading near flat. The Shanghai Composite Index slipped marginally and the Shenzhen Component Index rose marginally.