BEIJING (AP) — Chinese stocks sank Wednesday after Moody's cut the country's debt rating and other Asian markets rose following Wall Street's advance.
KEEPING SCORE: The Shanghai Composite Index lost 0.5 percent to 3,047.80 and Hong Kong's Hang Seng was unchanged at 25,410.81. Tokyo's Nikkei 225 index gained 0.5 percent to 19,707.87 and Sydney's S&P-ASX 200 added 0.2 percent to 5,774.40. Seoul's Kospi added 0.2 percent to 2,317.26 and benchmarks in Taiwan, New Zealand and Singapore gained. Jakarta declined.
CHINESE DEBT: Moody's Investors Service downgraded China's long-term local currency and foreign currency debt ratings, citing the country's rising debt. Moody's cut the rating to a still relatively robust A1 from Aa3 and changed its outlook to stable from negative. The change reflects an expectation "China's financial strength will erode somewhat" and economy-wide debt will rise, Moody's said. It said that while planned reforms will transform the economy and financial system, those will not prevent an increase in debt and potential government liabilities.
ANALYST'S TAKE: The China downgrade could "deal a blow to confidence in regional markets," said Jingyi Pan of IG in a report. "While the downgrade itself had not been regarded as a plunging drop in rating, the attention on China's worsening outlook could create jitters."
WALL STREET: U.S. stocks rose for a fourth day, with most gains going to banks. Scientific instrument companies and drug makers also rose. Auto parts companies were hammered after poor third-quarter results from AutoZone and home builders fell after sales of new homes sank in April. The Standard & Poor's 500 index added 0.2 percent to 2,398.42. The Dow Jones industrial average edged up 0.2 percent to 20,937.91. The Nasdaq composite rose 0.1 percent to 6,138.71.
ENERGY: Benchmark U.S. crude rose 13 cents to $51.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 34 cents on Tuesday to $51.47. Brent crude, used to price international oils, advanced 16 cents to $54.31 in London. It added 28 cents the previous session.
CURRENCY: The dollar gained to 111.90 yen from Tuesday's 111.77 yen. The euro edged down to $1.1181 from $1.1183.