Fitch Ratings downgraded Friday the rating of Italy one level to “A +” and two steps the rating of Spain, from “AA-“, both with a negative outlook because of increasing crisis in the euro area, which has impact on the whole region.
For Italy, the rating for short-term debt was reduced from “F1+” to “F1”. Country ceiling was asserted at “AAA”, reads a release of the credit rating agency.
Fitch announcement comes two days after Moody’s downgrade of Italy rating by three steps, to “A2” with negative outlook.
For Spain, Fitch maintained its rating for the short term debt at “F1 +” and country ceiling at “AAA”.
The downgrade reflects the increasing crisis in the euro area, which has a significant financial and economic impact, resulting in weakening of sovereign risk profile of the two countries.
As previously warned by Fitch, a credible and comprehensive solution to the crisis is a complex political and technical issue which takes time to implementation.
Meanwhile, the crisis had a negative effect on financial stability and growth prospects across the region, according to Fitch.
U.S. stocks, the euro and oil, were falling after Fitch downgraded Italy and Spain rating.
Shares on Wall Street, the euro and oil have entered a downward trend after Fitch downgraded the ratings of Italy and Spain because of the worsening crisis in the Euro zone.
Investors were already nervous ahead of a meeting Sunday of the leaders of France and Germany on European banks support.
Dow Jones was down by 0.15%, Standard & Poor’s 500 by 0.75% and the Nasdaq by 1.24%.
Euro was declining on the U.S. market by 0.2% to $1.3404 per unit after during the day, the transactions reached a peak of $1.3524 per unit.
At 4:39 p.m. GMT, Brent oil with delivery in November was quoted 93 cents down, at $104.8 per barrel.
Quotation of oil for the U.S. market lost 51 cents, to $82.08 per barrel.