What does Fitch downgrade of US credit rating to AA+ mean for the markets?

Rating agency Fitch on Tuesday downgraded the US government's top credit rating to AA+ from AAA, citing fiscal deterioration over the next three years and repeated debt ceiling negotiations. The development caused a flutter across equity markets, with most leading frontline global equity indices trading weak.

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Back home, the S&P BSE Sensex and the Nifty50 lost over 1 per cent each in intra-day deals to hit a low of 65,751.53 and 19,517.55 levels, respectively.

The development, according to Andrew Holland, chief executive officer, Avendus Capital Public Markets Alternate Strategies, is a 'bolt from the blue' and the markets were not expecting this at all