Asian stocks extend new year rout; China walloped by Fitch downgrades
Updated at 23:27 ET (04:27 GMT) with more details on China.
Investing.com-- Most Asian stocks fell on Thursday, extending declines after a weak start to the year on doubts over the timing of U.S. interest rate cuts, while Chinese markets were battered by Fitch downgrading four major state-owned asset managers.
Regional markets took a weak lead-in from Wall Street, with U.S. stock benchmarks falling for a second straight session on Wednesday as sentiment towards equities remained on edge. U.S. stocks also saw a heavy dose of profit-taking after a stellar melt-up through December.
China's bluechip Shanghai Shenzhen CSI 300 index was the worst performer in Asia on Thursday, losing 1.4% and hovering above a five-year low, while the Shanghai Composite index dropped 0.9%.
Fitch downgraded the ratings of four Chinese state-owned asset managers by one level, and put three of the four firms on watch for more potential downgrades.
The ratings agency cited increasing pressure on the four from an ongoing slump in the property market, as well as increased uncertainty over the government's ability to support the finances of the asset managers. This in turn presented uncertainty over the ability of the state-backed firms to snap-up non-performing assets from the open market, which bodes poorly for China's financial markets.
The downgrade presents another blow to sentiment towards China, and also comes a few weeks after Moody's (NYSE:MCO) warned of a potential downgrade to China's sovereign rating.
A positive private survey on the services sector did little to inspire confidence in the country, with the Caixin Services PMI showing that China’s service sector grew more than expected in December.
Chinese stocks were among the
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