The single rating agency pushed Austria a step down from AAA+ to AA+ and Italy to two notches from BBB+ from A. S&P also degraded ratings of Malta, Cyprus, Slovakia and Slovenia.

S&P's move may have deep impact on the financial status of the countries, and this negative cues came as a notification that the worst debt crisis is still far from over. The downgrading may further add to the borrowing cost of the nations and emerge as a fresh challenge to politicians.

“Today’s rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S.&.P said in the statement.

On confirming the report of France's degradation, French Finance Minister said, “It's not good news, but it's not a catastrophe."

However, S&P’s downgrading of nations has earned criticism by Euro zone politicians as they claim that there is no new meaning full information in the rating for the investors, rather it will only increase sense of worries.

Meanwhile, Europe and United States' shares fell after S&P downgrade rumors spread the market. Euro also fell to a 16 month low against dollar.

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