WPP shares fell to 347.21p, down 15.25p, in a week that has seen a rocky ride for media shares.
Earlier this month, WPP saw its shares fall by as much as 6%, hitting their lowest level for three years, on the back of more bad news from US rival the Interpublic Group of Companies, which reported another $165.7m (£103m) in charges and a collapse in profits.
The cut in WPP's debt rating from to BBB from BBB+ put its rating just two notches above "junk" status, as the ad industry continued to stare down a 2003 that shows no real signs of improvement.
Sir Martin Sorrell, the WPP chief executive, has with many other senior industry figures pointed to the start of 2004 for recovery to kick in, when the industry will be buoyed by the US presidential elections, the Olympics and the Euro 2004 football tournament.
In a statement, Fitch said: "The downgrade reflects the uncertain operating environment for the industry which, combined with the company's plans for continued share repurchase and acquisitions, is expected to limit the ability of the company to improve its credit profile materially over the intermediate term."
Fitch said its rating cut was influenced by advertiser uncertainly over the situation in Iraq. Most advertisers have taken an even view of the conflict, but there are widespread fears that, if the conflict is protracted, the industry could be hard hit.
"Barring a protracted military conflict, Fitch expects WPP to produce organic growth in line with the market level or better during the year."
WPP is still waiting for rating agency Moody's Investors Service to announce whether it plans to cut the group's rating also. Moody's had said it was considering such a move.
Last month, WPP was hit by trouble at Ford Motor, which overturned the decision of Sir Nick Scheele, president and chief operating officer, to consolidate all of its advertising and marketing into WPP following an internal inquiry.
WPP currently handles 80% of the car giant's advertising.
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