X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Stock Markets and Gold Rally, Dollar Tumbles
Mar 16, 2017


The US Fed raised interest rates by 25 bps from 0.75% to 1%. This is the second hike in last three months. This move is on the back of steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.

The Fed also stuck to its outlook for two additional rate increases this year and three more in 2018. The central bank lifted rates once in 2016.

However, markets are reacting surprisingly to the fed's decision. Stock markets across the world extended gains. Below chart highlights the performance of several stock markets, gold and dollar index. The chart indicates the performance of market indices from 14 December 2016 and 15 March 2017. This is the period between two consecutive fed rate hikes.

The key reason for the rally is fed reserve's forecast of rate hikes. The forecast is in line with its outlook from December 2016 i.e. three rate hikes in 2017. As per the above chart, Indian stock market outperformed the overall market and registered an impressive gain of 11%. Similarly, stock markets in the US and the UK increased by 5.8% and 6% respectively.

On the other hand, the US Dollar Index tumbled on the back of a dovish outlook from the Fed. The weaker dollar is helping commodities like gold. Gold is up 5.5% since mid-December 2016.

Data Source: Yahoo Finance

This Chart Of The Day was published in The 5 Minute WrapUp - Only This Separates You from Stock Market Treasure

Equitymaster requests your view! Post a comment on "Stock Markets and Gold Rally, Dollar Tumbles". Click here!

  

Our Most Popular Charts

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS