Asia stocks drop on Moody's cuts; Nikkei down 0.10%

Investing.com - Asian stocks fell in early Tuesday trading, as traders sold on a knee-jerk reaction to U.S. ratings agency Moody's decision to downgrade six European nations and slap negative outlooks on three AAA-rated nations.

During early Asian trading on Tuesday, Hong Kong's Hang Seng Index was down 0.09%, Australia's S&P/ASX200 was down 0.84%, while Japan’s Nikkei 225 Index was down 0.10%.

Prior to the opening bell in Asia on Tuesday, Moody's said it was downgrading sovereign ratings for Italy, Portugal, Spain, Slovakia, Slovenia and Malta, and slapped negative outlooks on Austria, France and the U.K., which ups the likelihood the latter three countries could lose their coveted AAA ratings.

While the ratings agency has said such moves were possible, making good on the threat sparked a sell-off in Asian markets.

"Moody’s is sort of lagging the other ratings houses here," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management, according to Bloomberg.

"The reality is we’ve been talking about this for so long that it should hardly be a surprise to anybody. But you tend to get negative knee-jerk reactions because that’s the way the markets work."

Stock markets had spent previous sessions moving upward in wake of the Greek parliament's approval of harsh austerity measures needed to open doors to a EUR130 billion lending facility arranged by the European Union, the European Central Bank and the International Monetary Fund.

While approval from the nation's lawmakers was a big step forward for the country, much work remains in implementing austerity measures such as pension reforms and public-sector layoffs.

In Hong Kong, the top decliners included COSCO Pacific, down 2.27%, CHALCO, down 2.15%, and CITIC Pacific, down 1.73%.

In Australia, the top decliners included GUD Holdings, down 6.28%, Tabcorp Holdings, down 4.83%, and Telstra, down 4.73%.

European stock futures indicated a lower opening.

France's CAC 40 futures pointed to a loss of 0.15%, while Germany ’s DAX 30 futures signaled a loss of 0.28%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.30%.

Dow Jones Industrial Average futures were down 0.16% while the S&P 500 futures were down 0.19%.

Later Tuesday, the Bank of Japan is tentatively scheduled to give a press conference to discuss monetary policy.

French nonfarm payroll numbers are due out, while in Germany, the German ZEW Economic Sentiment index will be released.

Market watchers will keep an eye on eurozone industrial output figures and even more so on U.K. inflation data.

In the U.S., retails sales, import price figures and business inventory data will emerge, while Treasury Secretary Timothy Geithner is set to speak.

New Zealand is due to release retail sales data, while in Australia, the Westpac Consumer Sentiment Index will hit the wire.