Raising interest rates is the behavior of the Bank of China to raise interest rates, which increases the borrowing cost of commercial banks from the central bank, thus increasing market interest.
Raising interest rates is generally unfavorable to the stock market. There is so much money flowing, and it remains basically the same. The announcement of interest rate increase by the central bank will make a large part of safe-haven funds withdraw from the stock market and invest in banks to buy bond wealth management products. The loss of funds is bad for the stock market and will cause the stock price to fall.
However, the impact of raising interest rates on the stock market is not absolutely negative, and it may have little impact. The specific situation depends on the purpose of raising interest rates.
There are many purposes of raising interest rates, such as curbing consumption, curbing market speculation, encouraging savings, reducing the money supply and so on. Different purposes have different effects on the stock market, but they are definitely negative.
Different sectors of the stock market have different reactions to raising interest rates.
It has little impact on consumer stocks, and the money that everyone should spend is still spent. It is impossible to save money for interest, especially savings.
It has a great impact on real estate stocks, and the real estate industry is highly indebted. The money for buying land in Gai Lou is basically borrowed from banks, so if banks raise interest rates, it will have a great impact on the real estate industry.
It also has a great impact on some companies that rely on import and export, and raising interest rates has a great impact on foreign exchange rates. Whether it is negative or positive depends on the company's business.
In short, raising interest rates is definitely bad for the stock market. The degree of influence depends on the purpose of raising interest rates, and different industries have different reactions to raising interest rates. If the interest rate hike is not aimed at market speculation, the impact on the stock market may not be great.
Raising interest rates is the behavior of the central bank of a country or region to raise interest rates, which increases the borrowing cost of commercial banks to the central bank, and then forces the market interest rate to increase. The purpose of raising interest rates includes reducing money supply, curbing consumption, curbing inflation, encouraging deposits and slowing down market speculation. Raising interest rates can also be used as an indirect means to increase the value (exchange rate) of domestic or local currencies against other currencies.
Generally speaking, the impact of raising interest rates includes:
The stock market is in a downturn (the stock market is down, but there is also a slight upward trend).
It is possible to alleviate inflation by reducing the speed of money circulation.
People spend less and save more.
Industrial and commercial enterprises reduce investment.
Stimulate the appreciation of domestic or local currencies.
Slow down the national or local economic growth.