Generally speaking, the higher the interest rate, the lower the stock price index. The reason is that under the condition of high interest rate, investors tend to deposit or buy bonds, which leads to the decrease of stock market funds and the decline of stock price index; Conversely, the lower the interest rate, the higher the stock index will be. The more important reason is that the production cost of enterprises will rise because of the rising interest rate. For example, the rising loan interest rate will lead to the rising financing cost, and the related downstream enterprises will raise the prices of related products because of the rising financing cost, which will lead to the overall increase of production costs, the related profits will fall, and the share price representing shareholders' rights will also fall, and vice versa. In the process of world economic development, the fluctuation of inflation, currency exchange rate and interest rate has become a common phenomenon in economic life, and its influence on the futures market is increasingly obvious. However, in recent years, the stock market in western countries is still active when the interest rate of banks rises, because investors often choose between the two: the risk of bank deposits is small, the interest rate is high, the income is stable, but it is not flexible, and the funds cannot be used for other purposes for a fixed period of time, which is difficult to offset the losses caused by inflation. Moreover, stocks can be bought and sold, which is more flexible and risky, but when you are lucky, you can get big profits. Therefore, in the process of raising the bank interest rate (which is already low), there are still some investors with risk preference who are keen on stock trading. The discussion on exchange rate is basically similar to interest rate, that is, the appreciation of local currency is beneficial to imports and not to exports. The impact of RMB interest rate hike and appreciation on the stock market should be comprehensively analyzed.

Supply and demand of funds and inflation level and expectation

When the market funds are abundant in a certain period, the purchasing power of the stock market is relatively strong, which will push the stock price index up, and vice versa. For example, a large number of domestic foreign exchange reserves lead to an increase in money supply, which usually leads to an increase in stock index prices. Due to the market-oriented reform of the economy and the adjustment of industrial structure and regional structure, the state often introduces changes in interest rates, exchange rates and policies for industries and regions, which will have an impact on the whole economy or some industrial sectors, thus affecting the trend of Shanghai and Shenzhen 300 constituent stocks and their indexes. Joint stock companies often borrow money from banks. With the increase of loans, banks gradually strengthen their control over enterprises and gain considerable voice. Although it is hoped that the dividend will be stable when the income of enterprises decreases, banks will support enterprises to pay less dividends or stop paying dividends for their own safety, thus affecting the stock price. Taxation also has a great influence on investors. Investors buy stocks in order to increase their income. If the state gives preferential tax treatment to certain industries or enterprises, their after-tax profits will increase relatively and their stocks will appreciate. The change of accounting standards will cause great changes in the book income of some enterprises, thus affecting the value judgment of investors.