Asian markets nose-dived Monday, despite assurances from credit rating agency Standard and Poor’s that its historic downgrade of the U.S. credit rating would have no immediate impact on Asia-Pacific sovereign ratings.

South Korea’s stock market plunged by more than 7 percent before recovering partly to close down 3.8 percent. Shanghai’s market was down by a similar amount, while Tokyo and Hong Kong lost more than 2 percent. Gold reached another record high, breaking through the $1,700 mark.

Traders were unnerved after S&P lowered its rating for U.S. government debt on Friday to AA+ from AAA .

The agency sought to ease Asian fears with its statement early Monday. But it also warned of longer-term negative factors for Asia-Pacific sovereign ratings, including the risks of a weaker financing environment, slower growth and higher risk aversion.

Meanwhile, China accused the United States and other developed countries of ignoring their responsibilities and placing the world economy at risk.

The People’s Daily – flagship of the ruling Communist Party – said in a commentary the developed countries must find the courage to face their problems and coordinate more closely with developing countries.

China is the United States’ biggest foreign creditor, holding an estimated $1.2 trillion in U.S. Treasury debt and billions more in dollar-denominated investments.