Investing.com - Asian markets fell in morning trade on Tuesday, with the Hang Seng Index leading losses after rating agency Moody’s downgraded Hong Kong’s credit rating to “Aa3” from “Aa2.”
The Hang Seng Index slumped 2.3% by 11:01 PM ET (03:01 GMT).
In a statement, Moody’s noted that the strength in the Chinese-ruled city’s institutions and governance is “lower than previously estimated.”
“The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed,” the agency said in a statement.
However, the rating agency moved its outlook to stable from negative.
Hong Kong’s government issued a statement on Tuesday and said it strongly disagreed with Moody’s assessment and was “deeply disappointed” by the decision.
China’s Shanghai Composite and the SZSE Component both dropped 1.0%.
Concerns over China’s coronavirus were cited as headwinds for local stocks today, after reports suggested evidence of the virus’ contagiousness among humans.
“As Chinese citizens travel home for the Lunar New Year, more cases of the new virus have been reported and it seems it is spreading,” said Zhou Hao, a senior emerging markets economist at Commerzbank AG. “There is a risk of an exponential outbreak” along the lines of the 2003 SARS virus, Zhou said.
Meanwhile, Japan’s Nikkei 225 slid 0.9% after the Bank of Japan kept policy unchanged as expected, though raised its economic growth forecast for 2020.
South Korea’s KOSPI traded 0.7% lower.
Down under, Australia’s ASX 200 fell 0.4%.
In other news, the International Monetary Fund trimmed global economic outlook for this year.
Global growth will accelerate this year to 3.3% in 2020 from 2.9% in 2019, the fund said on Monday. That is less than the 3.4% projected in October.