Fitch Rating has downgraded US to AA+ from AAA as the long term vision and this has affected the Indian Stock Market. With this Rating the market has gone down by more than 1% today. According to Fitch, with growing US debt they have reduced the ratings as well as the way US government is handling the issues also effected the ratings. This Rating is mainly of the long term effect and for medium term there is no issues.
PC: FitchRatings.com
This is actually a bad thing to be honest, not only for the US but for the global market. We all knew that printing more money is the problem and thus the effect is showing now. With more and more money printing their debt is increasing like anything and that will have an effect on the global economy. We have seen a little effect today where with the downgrade ratings the Asian market has fallen.
I know it is not a good thing but most of the US companies invest in Asia and when they do not have much cash they have to pull out the investment from the Asian market and in turn the market will have an effect. This is what we have seen today. With the downgrade ratings, some of the people panicked sell thinking that will have an effect in US market too. And that is true, as of writing the Nasdaq has fallen by around 1% and thus we can see the effect.
As the US dollar is linked to the world economy this is bound to happen. And same thing have happened in Indian Market too where the money has been pulled out thinking that the market will have adverse effect. This is true, I am not sure about tomorrow but seems like tomorrow there will again be the selling pressure where the Indian market can go down tomorrow.