European stocks opened lower Tuesday after a ratings agency yanked France's coveted AAA credit rating, while gains in Asia largely evaporated after the Bank of Japan concluded a policy meeting without new action.
European stocks opened lower Tuesday after a ratings agency yanked France’s coveted AAA credit rating, while gains in Asia largely evaporated after the Bank of Japan concluded a policy meeting without new action.
Moody’s Investors Service on Monday downgraded France one notch to Aa1 due to its weak prospects for economic growth and its exposure to Europe’s financial crisis. It kept the rating’s outlook at negative, meaning it could face future downgrades.
Britain’s FTSE 100 fell 0.3 percent to 5,721.95. Germany’s DAX fell marginally to 7,121.50. France’s CAC-40 shed 0.5 percent to 3,424.21.
“While the loss of the triple A rating will be a blow to French prestige the reality is it probably won’t really change that much in terms of the economic outlook for the country given the economic challenges facing all of Europe’s economies,” Michael Hewson, senior market analyst at CMC Markets, wrote in an email commentary.
- As USS Ranger departs, Navy's cost dilemma takes off
- UW tops new list of best western universities
- Seahawks courting a pair of cornerbacks as free agency looms
- Microsoft co-founder says he found sunken Japan WWII warship
- Seattle's micro-housing boom offers an affordable alternative
Most Read Stories
Wall Street also appeared headed for losses. Dow Jones industrial futures fell 0.1 percent to 12,723. Broader S&P 500 futures dropped 0.1 percent to 1,381.
Asian stocks were mixed Tuesday, supported to some degree by confidence that President Barack Obama and the U.S. Congress will reach a budget deal before the end of the year to avert tax hikes and spending cuts that could throw the world’s No. 1 economy into recession.
Japan’s Nikkei 225 index edged down 0.1 percent to close at 9,142.64, after the central bank decided to leave interest rates unchanged near zero after a policy meeting. The decision, while expected, was subject to speculation ahead of national elections on Dec. 16. The party likely to head a coalition government has said it would urge the central bank to take a more aggressive stance on monetary policy to help the country’s decelerating economy.
Hong Kong’s Hang Seng fell 0.2 percent to 21,228.28 while South Korea’s Kospi added 0.6 percent to 1,890.18. Australia’s S&P/ASX 200 advanced 0.6 percent to 4,385.70. Benchmarks in Singapore, Taiwan, and the Philippines rose. Indonesia and Thailand fell.
Mainland Chinese shares also ended down on lower trading volumes, analysts said. The Shanghai Composite Index fell 0.4 percent to 2,008.92 and the smaller Shenzhen Composite Index lost 0.2 percent to 799.35.
Markets may be in for some volatility because volumes will likely be light leading up to the Thanksgiving holiday in the U.S. on Thursday. Big price swings are more likely when there are fewer buyers and sellers in the market.
Investors will also be monitoring this week’s developments in Greece’s bailout saga, amid hopes that the country’s euro partners and the International Monetary Fund will finally sign off on the release of (EURO)31.5 billion, which is money the country needs to avoid bankruptcy.
Finance ministers from nations that use the euro will meet Tuesday. Later in the week, leaders will convene to discuss the European Union’s budget for the next few years.
Among individual stocks, rare earths miner Lynas Corp. jumped 3.9 percent in Sydney after saying it expects production at a plant in Malaysia to begin in December. The project has been targeted by activists over concerns about pollution.
Benchmark oil for December delivery was down 53 cents to $88.75 in electronic trading on the New York Mercantile Exchange. The contract rose $2.36, or 2.3 percent, to finish at $89.28 in New York on Monday.
In currencies, the euro fell to $1.2792 from $1.2807 late Monday in New York. The dollar fell to 81.22 yen from 81.33 yen.
Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson
AP researcher Fu Ting reported from Shanghai.