Sector movers: Financials and miners hit by U.S. debt downgrade

Rating agency Fitch's decision to downgraded the U.S. government's debt rating reverberated through global stock markets on Wednesday.

In London it was Financials and Miners that were hit hardest.

Although many economists appeared to downplay the importance that the decision from Fitch would have, some did concede that the agency's assessment was not without merit.

"August has a long-standing reputation as a tough month for equities. So far, the reaction to the US debt downgrade appears to be another boost to this old market adage," was IG chief market analyst Chris Beauchamp's take on matters.

"While there isn’t much new in the downgrade itself, it seems to have been the trigger for some wider selling. With softer data and earnings also hitting sentiment, stocks seem ripe for an August correction."

It was that perceived increase in the risk of higher funding costs for the world's largest economy, even if ever so slight, that hit Financials.

But if that was true of the U.S., then what of other economies.

Hence, the Greenback actually caught a small bid on the back of the spike in risk aversion, which in turn weighed on gold and copper prices, and commodities more generally.

But there were some gains to be had in Aerospace as BAE Systems's shares jumped after the engineer raised its guidance.

Top performing sectors so far today

Aerospace and Defence 6,899.84 +2.93%

Leisure Goods 28,557.17 +0.47%

Alternative Energy 0.00 0.00%

Alternative Investment Instruments NULL 0.00%

Automobiles and related providers NULL 0.00%

Bottom performing sectors so far today

Precious Metals and Mining 9,618.77 -3.87%

Life Insurance 6,276.02 -3.32%

Non-life Insurance 2,889.23 -2.64%

Banks 3,650.55 -2.55%

Industrial Metals & Mining 6,430.63 -2.55%