What US downgrading means

Investors may move from US to markets that offer better profit, providing a shot in the arm for China and other rising economies

Despite a two-day weekend buffer, the downgrading of the US credit rating on Aug 5 by Standard & Poor's from AAA to AA+ with a negative outlook and threat to lower it further to AA within two years has rocked the global capital market.

The Dow Jones Industrial Average fell 5.6 percent on Monday, the biggest one-day drop since December 2008, amid rising fears over the US and global economies. Stock prices rebounded on Tuesday after the US Federal Reserve announced that it would maintain the low interest rates until at least mid-2013 but fluctuated drastically on Wednesday and Thursday.