WELLINGTON: Asian stocks are set for a torrid session on Monday in response to debt turmoil in the U.S. and Europe, with fears of a global recession growing after a credit ratings downgrade for the world's largest economy.
Standard & Poor's cut the U.S. credit rating by one notch to AA-plus from AAA, saying it believed the U.S. deal on its debt ceiling fell short of what was needed.
Although the move had been anticipated investors were still spooked, prompting a flight to safer assets such as the Swiss franc and the Japanese yen.
U.S. stock futures opened sharply lower early on Monday, with Dow down 2.25 percent and S&P futures down lower, foreshadowing another route on Asian markets.
The European debt crisis also stepped up a level after a meeting of the European Central Bank pledged to take steps to "actively implement" its bond buying programme.
Earlier on Monday the bank released a statement which suggested it will buy Italian and Spanish bonds in a bid to stop the crisis spreading, sending the euro higher.
The first Asia-Pacific market to open, New Zealand, extended early losses to trade down 3.2 percent at a near two- year low of 3,171.3 after its first hour of trading to 2300 GMT.
Asian markets will be looking to a conference call between the Group of Seven finance heads, possibly with a statement issued, which will seek to instill confidence in the markets.
Australian stocks are set to slide, with share price index futures down 5 points to 4,045, a 60.4 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters
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Standard & Poor's cut the U.S. credit rating by one notch to AA-plus from AAA, saying it believed the U.S. deal on its debt ceiling fell short of what was needed.
Although the move had been anticipated investors were still spooked, prompting a flight to safer assets such as the Swiss franc and the Japanese yen.
U.S. stock futures opened sharply lower early on Monday, with Dow down 2.25 percent and S&P futures down lower, foreshadowing another route on Asian markets.
The European debt crisis also stepped up a level after a meeting of the European Central Bank pledged to take steps to "actively implement" its bond buying programme.
Earlier on Monday the bank released a statement which suggested it will buy Italian and Spanish bonds in a bid to stop the crisis spreading, sending the euro higher.
The first Asia-Pacific market to open, New Zealand, extended early losses to trade down 3.2 percent at a near two- year low of 3,171.3 after its first hour of trading to 2300 GMT.
Asian markets will be looking to a conference call between the Group of Seven finance heads, possibly with a statement issued, which will seek to instill confidence in the markets.
Australian stocks are set to slide, with share price index futures down 5 points to 4,045, a 60.4 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters
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