In the 70 years of history, it has happened for the first time that S&P has reduced the US credit rating to AA+ from AAA. And this decision of S&P has proved to be taxing for Hong Kong and China, whose shares have faced the highest low since July 2010.
Overall markets around the globe witnessed low trade due to the fears of double dip recession in west, and their fears has increased considerably, after S&P has downgraded the US credit rating.
Asia's banks have been witnessing an increase in dollar-funding costs, and credit growth has been declining as the Standard & Poor's(S&P) U. S. debt rating has reduced.
On Friday, ratings agency S&P reduced the long-term rating of US by one notch to AA+ from AAA, which flashed the selloff in global stock markets which has already been concerned about euro zone's debt crisis.
Whole world has been talking about the impact of the US damaged economy over the Asia-Pacific, but the Standard & Poor's Ratings Services (S&P) has claimed that the US economy is not having any harmful impact over the economy of Asia.
Chinese economy witnessed growth of 9.5% in the first half of this year as the exports were 24% higher than the corresponding period of the year 2010.
According to reports, Pranab Mukherjee, India's Finance Minister, while talking in après conference claimed that United State’s top-rank AAA credit rating failure from Standard & Poor's, have left the Indian economy to suffer from critical state of affairs.
The governments of various Asian Countries including Japan were doubtful about the debt-crisis in the American economy. As per a report, the Government of America was unable to control the debt-crisis in the nation.
The investors of the Asian market were thinking to keep their US treasury holdings preserved for the time being. The policy makers from China to Japan to Southeast Asia are enticed to Treasuries in order to incur profits from the poor economic condition of America, which has resulted in the increase in the rates of the currencies against dollar.
According to reports, in the last 18 months, Hong Kong’s Hang Seng Index was reported with the worst turn down and its precariousness index had the biggest rush forward to the evidences, which claimed that, since the 2008 year financial crisis, it was the biggest loss to the country’s economy.
Crude Oil prices dropped in the Asian trade on Thursday, due to the constant fears over the US economy, suggested an analyst.
New York’s main contract, light sweet crude for September, delivery slipped by 32 cents to $91.61 per barrel and Brent North Sea crude for September delivery fell by five cents to $113.18.
According to reports, Hartadi Sarwono, Indonesian bank’s Deputy Governor announced that the last quarter results have declared that as compared to last year, this year, the central bank revenues have increased by 6.8%.
However, the report also claimed that beside the fact that the bank averted its interest rates from the last quarter growth, the country’s economic growth speed continued to increase.
In the meantime, Bloomberg News survey affirmed that as compared to the last years, GDP was recorded at 6.46% this year, it increased by 6.5%.