Developed market stocks fell on Friday and bonds rose, pushing yields sharply lower, after the U.S. Federal Reserve cited weakening global growth and the recent upsurge in financial market volatility as its reasons for not raising interest rates.
Stocks and currencies in emerging markets, however, which are more vulnerable to higher U.S. interest rates, welcomed the Fed's decision on Thursday to postpone "lift off" for at least another month, and rose across the board.
"The Fed's rather downbeat outlook came as an unwelcome surprise, and it's likely to take a while for investors to figure out whether the Fed is seeing something that the rest of us aren't," said Michael Hewson, chief strategist at CMC Markets.