Asian stocks lower after Portugal debt rating cut

Asian stocks lower after Portugal debt rating cut

Hong Kong: Asian stock markets mostly edged lower on Wednesday as investors proceeded cautiously following a weak performance on Wall Street and a downgrade of Portugal’s debt rating.

Oil rose above $97 a barrel while the dollar weakened against the yen and euro.

Hong Kong’s Hang Seng slipped 0.4% to 22,652.90 and South Korea’s Kospi edged down less than 0.1% to 2,161.67 while Japan’s Nikkei 225 index rose 0.2% to 9,988.83.

The Shanghai Composite Index dipped 0.8% to 2,791.23 while benchmarks in Australia, New Zealand and Singapore were also lower.

“Overnight positive market sentiment faded away on renewed concern over eurozone peripheral debt crisis," strategists at Credit Agricole CIB wrote in a research report.

Eurozone retail sales and US factory orders were slightly lower than expected and “we expect that there will not be a great shift in sentiment ahead" of a meeting by the European Central Bank on Thursday and US jobs data on Friday, the report said.

The central bank is expected to raise its main interest rate by a quarter of a percentage point for the second time since April.

Meanwhile, credit ratings agency Moody’s downgraded Portugal’s government debt to “junk" status after trading closed in Europe on Tuesday. The agency cited concerns that the country will not be able to meet targets to reduce its deficit due to the “formidable challenges" it is facing in cutting spending.

In the US, major stock indexes were mixed Tuesday but dipped after the Moody’s report came out. The Dow Jones industrial average fell 0.1% to close at 12,569.87. The Dow had risen as much as 19 points in morning trading after the Commerce Department reported an increase in orders for manufactured goods.

The Standard & Poor’s 500 fell 0.1% to 1,337.88. The Nasdaq composite index rose 0.3% to 2,825.77. In currencies, the euro rose to $1.4453 against the dollar from $1.4410 late Tuesday.

The dollar fell to ¥80.82 from 81.04. Benchmark oil for August delivery was up 17 cents at $97.05 a barrel in electronic trading on the New York Mercantile Exchange. In London, Brent crude added 7 cents to $113.68 per barrel on the ICE Futures exchange.