British stocks slump after Fitch downgrades U.S. credit rating

LONDON, Aug. 2 — British stocks slumped on Wednesday, reflecting worried global markets, after credit ratings agency Fitch downgraded the U.S. government’s credit rating.
The FTSE 100 index, the leading benchmark for blue chip companies listed in the United Kingdom, ended the session down 1.36 percent, or 104.64 points, at 7,561.63.
Retailer Ocado Group, Endeavour Mining, and insurance company Prudential were among the worst performers.
Fitch, one of three major independent agencies that assess creditworthiness, on Tuesday lowered the U.S. credit rating from the top-notch AAA to AA+ over concerns about “growing debt burden” and “an erosion of governance.”
In effect, this is saying the United States is now of higher risk than previously thought, and the news took markets by surprise, Laith Khalaf, head of investment analysis at online investment platform AJ Bell, said.
“When the debt of the world’s largest economy is seen as lower quality, it will naturally trouble investors and make them rethink their portfolios,” Khalaf added.

Xinhua