Asian Stock Market: Continues trade on a negative note, US downgrade sparks the selloff

• Asian stock markets remain under pressure on Thursday. 
• Fitch downgraded the US rating to AA+ from AAA. 
• Investors are concerned about the economic slowdown in the world’s second economy.

Asian stock markets continue trade on a negative note on Thursday following Fitch's downgrade of the US government's credit rating. Wall Street's face selloff overnight. Nasdaq slumps more than 2%, the worst one-day performance since February.

That said, Fitch Ratings downgraded the US Long-Term Foreign Currency Issuer Default Rating from AAA to AA+, citing an expected fiscal deterioration over the next three years.

At press time, the Nikkei slumps 1.42%, Shanghai drops 0.31%, Hang Sang dips 0.63%, the Shenzhen Component Index drops 0.28%, and the Kospi Index is down 0.89%.

In Japan, Bank of Japan (BoJ) Governor Kazuo Ueda indicated that the tolerance band for the benchmark 10-year Japanese Government Bonds (JGB) will widen from 0.5% to 1.0%. The move pushed JGB yields to their highest level since 2014. The 10-year JGB rose to 0.656% on Thursday. 

In China, the Chinese Caixin Manufacturing PMI for July fell to 49.2 from 50.5 prior, versus a market expectation of 50.3. This figure marked the lowest level since January. This, in turn, weighs on risk sentiment as investors concern about the economic slowdown in the world’s second economy.

Moving on, market participants will monitor the US ISM Services PMI, Initial Jobless. The key highlight this week will be the US Nonfarm Payrolls. The US economy is expected to have created 180,000 jobs in July. The data could give direction to riskier assets like Gold, equities, the AUD/USD, etc.