Asian stocks fell in early Monday trading, but losses were not as severe as some analysts feared, in the initial world markets response to Standard & Poor's downgrade of U.S. debt.

U.S. stock futures tumbled about 1.7% in early electronic trading as investors, not to mention political leaders, nervously awaited the reaction of world markets.

In early Tokyo trading, the Nikkei index fell 124 points, or 1.3%. The sell-off was not as severe as Friday's 3.7% drop that followed the huge drop in U.S. stocks on Thursday.

South Korea's KOSPI index slipped 1.6%. In Australia, the All Ordinaries index lost 0.7%. The Shanghai composite started 0.8% lower.

However, Hong Kong's Hang Seng index tumbled 2.6% at the open.

The mood on the Tokyo Stock Exchange floor was described as "tense" by Tsutomu Yamada, market analyst. But he said actions taken by Western finance leaders and Treasury buying by Japan mean that the initial reaction in Tokyo won't be as bad as some experts had predicted.

Meanwhile, the European Central Bank signaled in a statement that it was ready to begin buying Italian and Spanish government bonds, stepping up its efforts to slow the rising panic over the euro zone's debt crisis. In a separate announcement Sunday, finance ministers from the G-7 -- a group of significant world economies -- pledged support for troubled countries.

Stocks After The Downgrade

In U.S. stock markets, S&P 500 futures fell 21.50 points, or 1.8%, according to data from the Chicago Mercantile Exchange. They were down by as much as 36.80 points.

Nasdaq-100 futures contracts slipped 36.75 points, or 1.7%. They were down as much as 58.25 points lower earlier.

Dow Jones industrial average futures were 203 points, or 1.8%, lower after being down as much as 309 points earlier

Futures trades were the first gauge of investor sentiment following Friday night's downgrade, removing the United States' AAA status for the first time. They give an indication of how investors will react when regular-hours U.S. trading begins at 9:30 a.m. ET Monday.

Futures trading began Sunday at 6 p.m. ET, two hours before the opening of the key Tokyo stock market.

S&P's downgrade followed last week's debt-ceiling agreement that "falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."

The ratings agency also blasted the partisan bickering that led to the debt ceiling fight. "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed," S&P said.

Ahead of the start of futures trading, most economists and investment strategists said that while there could be an initial shock, the downgrade itself should not impact markets too much.

"S&P doesn't know anything that investors don't already know, so the downgrade should not change expectations and interest rates," said Martin Feldstein, Harvard economist and former head of the National Bureau of Economic Research.

Among other developments Sunday, the White House announced that Treasury Secretary Tim Geithner will be staying at his post. An administration official told CNN that Geithner will stay until at least fall of 2012.

--CNN's Kyung Lah in Tokyo contributed to this report.