Market Update: Dow Jones Industrial Average Ended in Red. Concerns About Global Downturn Making Investors Worried

  • Dec 21, 2018 AEDT
  • Team Kalkine
Market Update: Dow Jones Industrial Average Ended in Red. Concerns About Global Downturn Making Investors Worried

Federal Reserve's Rate Hike Decision Weighed on Markets

It would not be wrong to assume that the market participants are having a tough time in digesting the news about the interest rate hikes which was announced by the Federal Reserve recently. The US central bank has hiked the interest rate by 25 basis points or bps which happens to be final and the fourth one of 2018. This step has been taken by the Federal Reserve even though the US President Donal Trump had been seen against this move of the US central bank. The Federal Reserve has decided that it would slow down the speed of the interest rate increases moving forward. But it can be assumed that the Federal Reserve’s decision of hiking the rates in December have impacted the investors’ sentiments more.

Apart from the Federal Reserve’s decision of raising the interest rates, one more factor which has been weighing over the investors’ sentiments is the worries about the global slowdown in the economic growth. The global uncertainties tend to impact the investors’ sentiments and they try to avoid making investments in the equities. On December 20, 2018, Dow Jones Industrial Average ended the session at 22,859.60 which implies that the index has fallen 464.06 points or 1.99%.

Can Oil Markets Impress the Market Players?

The can be assumed that the, broadly, oil markets are also witnessing the impacts of the downturn in the US markets. Since the decision of interest rate hikes has impacted the US stock markets, it can be assumed that the unfavourable momentum in the US markets increases the fears of the global slowdown in the economic growth which, in turn, raises the worries about the demand of oil. From the past few months, it can be assumed that the oil markets are being impacted by several macroeconomic factors which, in turn, is impacting the sentiments of the investors. It can be said that if the broader equity markets witness a rise and encounter favourable momentum, the oil markets might get helped.

Australian markets ended On Negative Note: Should You Be Worried?

It can be assumed that the impact of the downturn in the US markets has also impacted the Australian markets. The Australian markets closed the session in red today. On December 21, 2018, S&P/ASX200 settled at 5467.6 which implies the fall of 38.2 points or 0.7%. Coming to the stocks which have gained momentum, Resolute Mining Limited (ASX: RSG) and Healthscope Limited (ASX: HSO) closed the session by witnessing the rise of 6.393% and 5.825%, respectively. However, the stocks like Orocobre Limited (ASX: ORE) and Pilbara Minerals Limited (ASX: PLS) have ended the session in red by declining 10.979% and 8.661%, respectively.

Stockland (ASX: SGP) had made an announcement related to its sale which was done to Frasers Property Australia. Read the full news here. Also, Petrel Energy Limited (ASX: PRL) had signed, with Warrego Energy, a share purchase agreement. Read the full news here.

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