Hong Kong Takes Tumble on Downgrade

Stocks in Hong Kong led losses regionally among major Asian markets on Tuesday after ratings agency Moody’s cut its rating for the city to Aa3 from Aa2 on Monday.

In Japan, the Nikkei 225 index shed 218.95 points, or 0.9%, to 23,864.56,

The Bank of Japan kept its short-term policy rate unchanged at -0.1% while keeping its 10-year Japanese government bonds yield target around 0%, largely in line with expectations.

In its outlook for economic activity and prices, the Japanese central bank said the country’s economy is "likely to continue on an expanding trend" through fiscal 2021.

The Japanese yen traded at 109.98 against the U.S. dollar after touching an earlier low of 110.21.

In Hong Kong, the Hang Seng index dumped 810.58 points, or 2.8%, to 27,895.33, with shares of life insurer AIA plunging beyond 3%.

The moves came following the ratings downgrade from Moody’s on Monday, where the agency also changed its outlook for Hong Kong to stable from negative. The city has been plagued by months of protests that have periodically degenerated into violence, with seemingly no resolution in sight.

Australian markets gave up a small share of their strength, The Australian dollar changed hands at $0.6858 after seeing an earlier high of $0.688.

CHINA

In Shanghai, the CSI 300 skidded 71.52 points, or 1.7%, to 4,114.31.

Chinese tech behemoth Tencent also dropped 2.9%, after the firm’s Chairman Pony Ma reportedly sold 2 billion Hong Kong dollars (approx. $257.31 million U.S.) worth of shares.

In other markets

Markets in Taiwan were shuttered for holiday

In Korea, the Kospi index tumbled 22.95 points, or 1%, to 2,239.69

In Singapore, the Straits Times Index slid 32.72 points, or 1%, to 3,247.17

In New Zealand, the NZX 50 regained 58.19 points, or 0.5%, to 11,805.14

In Australia, the ASX 200 docked 13.17 points, or 0.2%, to 7,066.34