Dubai: Most global equity markets may remain depressed this week, as investors expect a rate hike sooner than later from the Federal Reserve, with market watchers also eyeing Greece for any further leads.
On Friday, the Dow Jones Industrial Average ended 1.54 per cent lower at 17,856.78, while S&P 500 Index ended 1.42 per cent lower at 2,071.26.
“We are reaching a critical level in the US, which might prompt the Federal Reserve in the coming quarters. We should have US equity markets more volatile,” Sebastien Henin, head of asset management at The National Investor told Gulf News.
Friday’s stronger-than-expected jobs report boosted expectations of a US rate increase as soon as June, causing the market to sell off.
“We have reached full employment target so I don’t see many reasons for them to maintain low level of rates,” Henin said. Dollar would see further strength, analysts said.
Euro Stoxx 50 price ended down 0.02 per cent at 3,617.62, while France’s 40 index ended 0.02 per cent higher at 4,964.35.
Temporary slide in gold:
“Gold may see some more downside due to a strong dollar. Many investors feel that it’s a temporary slide before the big rally. This could be an opportunity to accumulate gold at lower end of the range,” said Pradeep Unni, senior relationship manager, Richcomm Global.
Gold fell nearly 3 per cent to a three-month to $1,167.40, on track for its biggest daily drop since October 2013. A stronger US currency makes dollar-denominated gold more expensive for holders of other currencies.
Gold may fall another $30-40 an ounce from the current levels in coming weeks, Unni said. Gold dropped 29 per cent in the previous two years, before erasing all of the gains in 2015.
