Asian stocks fell as the markets opened, only hours after the US approved its debt-deal, with investors none too confident about the American economy.
No sooner was the the ink dry on the legislation to raise its borrowing limit than all eyes turned to the stalling US economy.
China criticised Congress, saying it had not gone far enough in dealing with the ticking time bomb of debt. The $2.1 trillion deficit-reduction plan was inadequate said Chinese officials, adding that Beijing still regarded the US as a threat to the global economy.
Wall Street’s reaction was initially one of relief that the US had avoided a default but stocks soon fell as focus returned to poor consumer spending data and weak GDP figures.
Fears of a credit rating downgrade were uppermost in minds as that would increase the borrowing and just add to the US debt.
But later came news that European markets can reflect upon – that Moody’s and Fitch are to maintain the triple-A rank for the US for now. Both however want to see the US debt burden reduced further if it is to keep its pristine credit rating.