Stock Market Extends Gains As Fed Hikes Interest Rates

U.S.-NEW YORK-STOCKS
Stock Market Extends Gains As Fed Hikes Interest Rates
Author

19 March, 2017

The dollar briefly plunged below ¥113 in Tokyo trading on Thursday, dampened by less-hawkish-than-expected interest rate projections by the U.S. Federal Reserve.

Dow Jones closed down by 0.09 percent, S&P 500 ended down by 0.18 percent, Nasdaq finished the day down by 0.03 percent.

Canada's main stock index rose on Thursday, with the materials group leading broadbased gains as base and precious metal prices gained further ground following the Federal Reserve interest rate decision the day before.

Precious metals prices climbed on Thursday to their highest level in over a week after the United States central bank signalled only gradual rate tightening and the dollar slid to its lowest in five weeks.

The normalisation of Fed monetary policy also pushed some emerging market central banks to follow suit: China's central bank increased short-term interest rates for the third time this year in a move seen aimed at curbing capital outflows and supporting the yuan.

"Whether folks agree or disagree with the need to hike, the key here is that the Fed has signaled to markets, and importantly USA and global businesses, that it is in control and the economy is moving as expected", said Greg McKenna, chief market strategist at AxiTrader, in a note.

By contrast, the euro was mostly unruffled by the result of the Dutch election Thursday morning, even after preliminary results backed up the earlier exit polls, showing that Prime Minister Mark Rutte had held off the challenge of far-right rival Geert Wilders.

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Shortly afterwards, based on the same legal theory, the OAG launched its investigation into Exxon. The attorney general, Eric Schneiderman, made the accusation in a letter to a NY court Monday.


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Aided by stronger oil, Wall Street was cautiously firmer around mid-session in NY, with the Dow edging up around 0.3 percent.

"This meeting has the potential to be more heated so to speak, with some very militant senior members of the new Trump administration in attendance and looking to shake the global trade tree", he said. The central bank's statement and forecasts for future rate increases was seen as less aggressive than had been anticipated.

Oracle surged to a record high of $46.99 and was last up 6.7 percent at $45.93 after the business software maker issued a better-than-expected quarterly profit. Meanwhile, Sydney's S&P-ASX 200 rose 0.2%.

Meantime, spot gold was was up 0.3% at $1,230.28 U.S.an ounce early Friday, taking its gains this week to 2%. West Texas Intermediate crude was up 1.5 percent at $48.45 a barrel.

Oil prices slipped as support from a weaker dollar was offset by USA crude inventories near record high levels.

Shares of Tesla rose 2.8 per cent to US$262.94 (RM1,166) after the electric carmaker said it would raise about US$1.15 billion as the company speeds up the launch of its Model 3 sedan. The dollar fell 0.5 percent against a basket of key currencies, adding to Wednesday's steep slide after the Fed's decision. The euro rose to $1.0733 from $1.0713, and the British pound rose to $1.2352 from $1.2301.


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