Know how US Fed rate hike will impact Indian stocks, gold and rupee

Zee Media Bureau

New Delhi: The US Federal Reserve is widely expected to announce a hike in interest rates at the end of its two-day policy meeting on Wednesday.

It would be the first US rate hike in nearly a decade, signalling the beginning of an end to an expansionary monetary policy that has supplied a tidal wave of liquidity to risk asset markets globally.

Let's have a look at how the US Fed rate hike will impact Indian stocks, gold and rupee.

FED'S IMPACT ON RUPEE

Extreme volatility in domestic equities as well as expectations that the Federal Reserve is on track to raise interest rates for the first time since 2006 will impact the rupee sentiment.

FED'S IMPACT ON STOCK MARKET

If the Fed lays out an aggressive schedule of future rate increases, stock markets could become very volatile and even plummet, say strategists.

Also Watch: How Indian stock markets will react if US Fed hikes interest rates ...

FED'S IMPACT ON GOLD

Investors have been cutting gold positions in anticipation of a first interest rate increase while the yellow metal has fallen about 10 percent so far this year. Higher rates could dent demand for the non-interest paying asset, while also boosting the dollar.