This week started with the bad news for the stocks. On Monday, the International Monetary Fund stated that the global economic outlook is not promising. The organization had to downgrade its growth forecast for 2019 to 2.9%. Moreover, the IMF also changed the forecast for 2020 as well.
On Tuesday, stocks fell in China. The Shanghai composite declined by 1.41% to about 3,054.14. The Shenzhen component also failed to strengthen its position. The index declined by 1.46% to 10,953.41.
At the same time, The Shenzhen composite dropped 1.28% to approximately 1,806.54.
In Japan, the Nikkei 225 closed 0.91% lower at 23,864.56. The Topix index fell 0.53% to end its trading day at 1,734.97.
In South Korea, the Kospi fell 1.01% lower to close at 2,239.69.
Moody’s and stocks
Ratings agency Moody’s downgraded its rating for Hong Kong. One day before, the agency made the decision to cut its rating for Hong Kong to Aa3 from Aa2.
On January 21, the Hang Seng index declined by 2.67% during the final hour of trading. Shares of life insurer AIA fell more the 3%.
The shares of Chinese tech giant Tencent fell 2.88%., shares of this company are listed on the Hong Kong Stock Exchange. Chairman Pony Ma reportedly sold $2 billion Hong Kong Dollars approximately $257.31 worth of shares.
Moody’s also changed its outlook for Hong Kong to stable from negative. Demonstrations started more than six months ago. However, protestors are not satisfied with the situation. Thus, protests may continue for another couple of months.
It is essential to mention that Hong Kong is one of the major financial hubs not only in Asia but around the globe. Instability in the city caused many problems for private and governmental organizations.
Due to the problems mentioned above, stocks continue to suffer as prolonged political unrest is a major challenge for the local economy.