Forexpros - Asian stock markets posted sharp losses on Monday, as markets were rattled following an S&P downgrade of U.S. government debt, fuelling concerns over the global economic outlook.
During late Asian trade, Hong Kong's Hang Seng Index plunged 3.05%, Australia's ASX/200 Index tumbled 2.7%, while Japan's Nikkei 225 Index sank 2.2%.
After markets closed Friday, ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA, and kept the rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and "America's governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed."
Shares in the financial sector, many of which have large exposure to U.S. Treasuries, performed poorly.
Japan's largest lender Mitsubishi UFJ Financial Group fell 2.6%, rival Sumitomo Mitsui Financial Group lost 2.25%, while Tokyo-listed shares of Citigroup plummeted 7.25%.
Shares in Japanese exporters with high exposure to the U.S. came under pressure, amid a downbeat outlook for export earnings.
Consumer electronics giant Sony saw shares drop 3.75%, plasma television maker Panasonic lost 2.3%, while automakers Honda and Nissan saw shares retreat 3% and 2.75% respectively.
In Hong Kong, shares in oil producers were sharply lower after crude oil prices hovered close to a nine-month low on the New York Mercantile Exchange, dampening earnings prospects for energy explorers.
Oil and gas giant PetroChina saw shares drop 3.7%, shares in China's largest offshore oil producer CNOOC tumbled 4.1%, while shares in Sinopec fell 3.1%.
The outlook for European stock markets was downbeat. The EURO STOXX 50 futures pointed to a loss of 0.5%, France's CAC 40 futures shed 0.7%, the FTSE 100 futures sank 1.5%, while Germany's DAX futures indicated a drop of 1.15%.
Later in the day, the euro zone was to publish a report on investor confidence.
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