Asia stocks down after credit downgrades in Europe

Asian stock markets fell on Tuesday after ratings agency Moody's slapped credit downgrades on six European Union countries due to the region's weak economic outlook and uncertain attempts to implement reforms.

Japan's Nikkei 225 index fell 0.2 per cent to 8,985.79. Hong Kong's Hang Seng was marginally lower at 20,876.88 and South Korea's Kospi lost 0.3 per cent to 2,000.26. Australia's S&P/ASX 200 lost 0.9 per cent to 4,246.40.

Moody's Investor Service on Monday downgraded its credit ratings on Italy, Portugal and Spain. France, Britain and Austria kept their top ratings but had their outlooks dropped to "negative" from "stable."

Moody's also cut its ratings on the smaller nations of Slovakia, Slovenia and Malta. All nine countries are members of the European Union.

Government debt ratings can play a major role in countries' borrowing costs because a lower rating often leads to higher interest rates that must be paid to offset investors taking on greater risk.

The downgrades come amid efforts to prevent recession-mired Greece from a chaotic default on its massive debts.
On Sunday, Greece's parliament approved sharp cuts in civil service jobs, welfare and the minimum wage, required by international leaders for a $171 billion (euro 130 billion) bailout that the country needs to avoid defaulting on its debt next month.

Stocks rose Monday on Wall Street after investors received news of the vote in Athens.

The Dow Jones industrial average rose 0.6 per cent to close at 12,874.04. The Standard & Poor's 500 index gained 0.7 per cent to 1,351.77. The Nasdaq composite gained 1 per cent to 2,931.39.

Apple Inc. reached a milestone, crossing $500 per share for the first time, closing at $502.60.

Benchmark oil for March delivery was down 38 cents to $100.53 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.24 to settle at $100.91 on Monday.

In currency trading, the euro fell to $1.3166 from $1.3202 in New York. The dollar was slightly down at 77.59 yen from 77.61 yen.

Tags: Asia stocks, asian market, credit downgrades, Europe, European Union, Hang Seng, Hong Kong, Japan, Kospi, Moody, Nikkei, South Korea