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Asian Markets Fall Amid Dim U.S. Economic Prospects


U.S. President Barack Obama

U.S. President Barack Obama

Stocks on Asian financial markets fell today as relief that the United States has averted a first-ever default gave way to renewed fears over prospects for the world's biggest economy.

Several leading Asian markets fell 2 percent or more, following a similar decline on U.S. stock markets on August 2.

The declines came after President Barack Obama signed into law an increase in the U.S. federal debt limit -- just hours before experts said the U.S. government would start running out of money to pay its bills.

Leading ratings agencies Moody's Investors Service and Fitch Ratings reaffirmed their triple-A rating for the United States, but Moody's said it had given the rating a "negative" outlook because of ongoing concerns about the future of the American economy.

Fitch said that while the debt ceiling agreement was an important first step, it was "not the end of the process towards putting in place a credible plan to reduce the U.S. budget deficit."

China -- the biggest foreign holder of U.S. debt -- today urged the United States to deal responsibly with its debt issues, and said it would further diversify its holdings away from the U.S. dollar.

compiled from agency reports
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