The  Asian  markets are the first to be exposed to the effects of Standard & Poor's (S&P) Rating Agency unprecedented downgrade of US debt from  AAA  to AA+ and this has resulted in a sell off in equities of over 2% in Japan and higher losses in other areas of the region.

Why did S&P make this downgrade at such a critical time?

All to do with the manner in which the US  eventually agreed to raise the borrowing ceiling, while agreeing a weak deal to reduce their borrowing and cut costs .The S&P considered the deal would halt the speed of the borrowing but that's all, leaving the situation virtually unchanged, the debt pile growing higher and higher year on year.

In the Eurozone, the G7 are trying to come up with a plan that calms market fears of contagion with the spotlight now on Italy and  but  the current market selling panic will take some turning around.

Futures markets both in the Europe and the US are looking at substantial opening losses.