Asian stocks fell Thursday after Fitch Ratings put the U.S. on negative watch, U.S. Treasury yields hovered near 20-year highs, and policymakers in Washington threatened an unprecedented government default. are struggling to build consensus to avoid
Hong Kong’s Hang Seng index fell 2%, Australia’s S&P/ASX200 index fell almost 1% and China’s benchmark CSI300 index fell 0.5%. Japan’s TOPIX was flat.
Stocks across the region plunged after ratings agency Fitch said it had put the US’ triple-A rating on negative watch, signaling to investors that it might be downgraded.
The last time Fitch put the US on negative watch was in October 2013, two days before the so-called X-date of that year, when government funding was expected to dry up during debt ceiling negotiations in Washington.
“We believe there is an increasing risk that the debt ceiling will not be raised or suspended by Term X, and as a result the government may begin to default on some debt payments,” the agency said. said.
Fitch said the decision reflected “a growing political partisanship that has prevented us from reaching a solution to raising or suspending the debt ceiling, even as X-date is fast approaching.” said that
Yields on Treasury bills, which mature next month, fell to 5.67% in Asian trading, down from a high of 5.88% earlier this week, but still close to highs in Asian countries. . Over 20 years. Yields on 2- and 10-year Treasuries also fell slightly.
The fall in Asian markets followed further weakness on Wall Street and the S&P 500 fell 0.7%, tech-led Nasdaq Composite as traders nervous about the prospect of a U.S. default in June. The index fell 0.6%.
But semiconductor stocks bucked the trend, posting a big rally after US chip maker Nvidia shares rose. Sales expected to reach $11 billion Sales for the three months to the end of July far exceeded analyst expectations on the back of soaring demand for chips used in generative artificial intelligence systems.
NVIDIA shares rose as much as 29 percent in post-market trading following the announcement, while in Asia Taiwan Semiconductor Manufacturing Co. and South Korea’s SK Hynix rose about 3 percent and 5 percent, respectively.
Futures markets expected the S&P 500 index to rise 0.4% and the FTSE 100 index to rise 0.3% when Wall Street opened later in the day.
