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Worldcrunch

World Markets Cool After US Fiscal Deal Hopes

LES ECHOS (France), REUTERS, THE WALL STREET JOURNAL (USA)

Worldcrunch

Global shares were mixed Tuesday, hesitating between hopes of a compromise to avoid a U.S. fiscal meltdown, and worries after Moody's Investors Service scrapped France's top credit rating.

Asian bourses closed mostly higher in the wake of Wall Street’s almost 2% climb on Monday thanks to expectations that Congress would reach a compromise to avoid $600 billion in tax increases and spending cuts due to start in January -- the "fiscal cliff" that threatens to derail the U.S. economy, according to Reuters.

But the euro zone's debt crisis saw Moody's cut France's government bond rating from Aaa to Aa1 after similar action by Standard & Poor's in January, The Wall Street Journal reports.

[Photo: Seth Tisue]

The agency also kept its negative outlook, citing France’s uncertain fiscal outlook and deteriorating economic prospects. 

France’s Finance Minister Pierre Moscovici was quoted by French business daily Les Echos as saying he "deplores" Moody's decision, and said the country's economic outlook should also be judged on more recent decisions by the government to institute long-term reforms.

See Moscovici talk to Bloomberg TV about Moody’s Investors Service's decision to downgrade his country’s credit rating.

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