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Market Update : 
Fed Action Driven Rally Falters, Gold Up
Author: 123jump.com Staff
123jump.com
Last Update: 6:20 PM EST January 30 2008


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The Federal Reserve lowered short term rates by 0.5% to 3.0% and cited substantial downside risks to the economy. The Fed has lowered rates by 1.25% in nine days to calm domestic and international markets. The Fed action may prove inflationary in the medium term and force the Fed to change the course if the economy does not slowdown in the months ahead. Stocks rallied after the Fed decision, but lost neary 1.6% gains in index at close.

 
The dollar closed marginally weaker today, encountering resistance at US$0.8900 for the second day running, as traders held their positions ahead of the US interest rate decision.

At the close the dollar was trading at US$0.8877/83, down marginally from yesterday''s close of US$0.8880/84. Dollar traded between a low of US$0.8872 and a high of US$0.8894 in the session.

Of the ASX 200 index shares, Aquarius Platinum led the gainers with a rise of 6.3% followed by increases in Alesco Corp Ltd of 4.3%, in Alumina Limited of 4%, in Newcrest Mining of 3.7%, and in Onesteel Limited of 3.5%.

Of the ASX 200 index stocks, Emeco Holdings L led the decliners with a fall of 24.5% followed by losses in Allco Finance Group of 10.5%, in Roc oil Company of 8.9%, in Riversdale Minin of 8.5% and in Tower Australia of 7.4%.
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