Asia markets poised to fall as Fitch lowers U.S. credit ratings

Asia-Pacific markets are set to largely fall Wednesday after ratings agency Fitch cut the U.S. credit rating from AAA to AA+, citing “expected fiscal deterioration over the next three years.”

IG market analyst Tony Sycamore said this will spark risk aversion flows, which means lower equities in Asia, as well as safe haven buying of treasuries and currencies such as the Japanese yen and Swiss franc against riskier currencies, such as the Australian and New Zealand dollars.

South Korea saw its inflation rate for July come in at 2.3%, hitting its lowest level in 27 months and recording its sixth straight month of decline.

Futures for Australia’s S&P/ASX 200 point to a lower open, standing at 7,360 compared to its last close of 7,450.

Japan’s Nikkei 225 is also set to fall, with the futures contract in Chicago at 33,145 and its counterpart in Osaka at 33,190 against the index’s last close of 33,476.58.

Hong Kong’s Hang Seng index futures stood at 19,892, pointing to a weaker open compared to compared to the HSI’s close of 20,011.12.

Overnight in the U.S., the three major indexes ended mixed, with the Dow Jones Industrial Average up 0.2% and briefly touching its highest level this year, while the S&P 500 lost 0.27% and the Nasdaq Composite down 0.43%.

— CNBC’s Samantha Subin and Hakyung Kim contributed to this report