ASX down 0.45% at noon as Fitch downgrades US credit rating

Market Reports

by Peter Milios

Fitch, one of the three major independent credit rating agencies, has downgraded the credit rating of the US government due to mounting concerns about the country's financial situation and its increasing debt load. The rating has been lowered from the highest level of AAA to the slightly lower rating of AA+.

Fitch cited a "steady deterioration" in governance over the past two decades as a significant factor behind the downgrade. This move signals a heightened level of caution about the US government's ability to manage its finances and maintain its creditworthiness in the global financial markets.

At noon, the S&P/ASX 200 is 0.45 per cent lower at 7,321.50.

The SPI futures are pointing to a fall of 36 points.

Best and worst performers

The best-performing sector is Consumer Staples, up 0.37 per cent. The worst-performing sector is Information Technology, down 1.82 per cent.

The best-performing large cap is QBE Insurance Group (ASX:QBE), trading 1.91 per cent higher at $15.97. It is followed by shares in Insurance Australia Group (ASX:IAG) and Orica (ASX:ORI).

The worst-performing large cap is Xero (ASX:XRO), trading 3.01 per cent lower at $120.00. It is followed by shares in Pro Medicus (ASX:PME) and James Hardie Industries plc (ASX:JHX).

Asian markets

Asia-Pacific markets extended their losses on Thursday, tracking Wall Street’s sell-off after ratings agency Fitch downgraded the United States’ long-term credit rating from AAA to AA+.

In Asia, investors will be watching the Caixin private survey for China’s service sector activity in July.

Hong Kong’s Hang Seng index dropped 0.23%, while mainland Chinese markets were also all lower. The Shanghai Composite was down 0.36% and the Shenzhen Component shed 0.15%.

Japan’s Nikkei 225 tumbled 1.03%, leading losses in the region, while the Topix also fell 0.9%.

South Korea’s Kospi fell marginally, but the Kosdaq was up 0.33%. South Korean internet giant Kakao saw its second quarter net profit fall by 44%, prompting a slide in its shares.

Company news

Liontown Resources (ASX:LTR) has agreed to proceed with the delivery of Direct Shipping Ore (DSO) product to provide an early source of revenue ahead of first concentrate production at the Kathleen Valley Lithium Project. Managing Director and CEO, Tony Ottaviano, said: “Therefore, progressing with the production of DSO not only provides early revenue potential, but also enables us to derisk the project by field testing our ore sorting and logistics solutions.” Shares are trading 0.37 per cent higher at $2.73.

Elementos (ASX:ELT) confirms zinc mineralisation and by-product potential at Oropesa Tin Project. Managing Director Joe David commented: “These results now present the necessary data to further evaluate the potential for a maiden zinc Mineral Resource at Oropesa and a zinc by-product.” Shares are trading flat at 15 cents.

Resource Mining Corporation (ASX:RMI) announced that at their Kola lithium project, assays point to the presence of lithium-bearing pegmatites in the northern part of the project, and along trend with Keliber’s deposits. Executive Chairman, Asimwe Kabunga, said: “We look forward to the commencement of drilling within these extremely prospective regions as soon as our reservation applications are converted into exploration permits.” Shares are trading 1.89 per cent higher at 5.4 cents.

Commodities and the dollar

Gold is trading at US$1973.80 an ounce.

Iron ore is 2.4 per cent lower at US$106.95 a tonne.

Iron ore futures are pointing to a 2 per cent fall.

One Australian dollar is buying 65.42 US cents.

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