Asian shares plunged today on the S&P downgrade of American debt. Chinese shares fell almost 4 percent, while the Nikkei and Heng Sang fell 2%. The Chinese hold a lot of American debt and now that it has been downgraded the borrowing will probably stop. Despite the obvious connection to the downgrade, the severe plunge in stock prices maybe also due to the weakening global economy, most notably America’s.
When America weakens economically Asian exports tend to be hurt as one of the biggest consumers of Asian products is the USA.