The US markets closed lower on Monday, with the Dow Jones Industrial Average ending August with the steepest monthly loss in more than five years, while the benchmark S&P 500 and the Nasdaq Composite recorded the largest monthly declines since May 2012. Meanwhile, the weekend economic symposium in Jackson Hole, Wyo., sponsored by the Federal Reserve Bank of Kansas City, only increased the level of uncertainty over the next move in US interest rates. The market’s overall are weighed down by continued worries about China’s slowing economy and the uncertainty over the timing of a rate increase by the Federal Reserve. Fed policy makers have left the option of a September rate increase wide open. On the economy front, business activity in the US Midwest declined modestly in August and fell just short of expectations, but showed expansion in the region for the second consecutive month. The Chicago Business Barometer for August was 54.4. A reading above 50 indicates expansion in the sector.
Meanwhile, Fed Vice Chairman Stanley Fischer stated that US inflation will likely rebound as pressure from the dollar fades, allowing the Federal Reserve to raise interest rates gradually. The influential US central banker was circumspect whether he would prefer to raise rates from near zero at a much-anticipated policy meeting on September 16-17. But he added that downward price pressure from the rising dollar, falling oil prices, and slack in the US labor market is fading. The cautious confidence from Fischer, as well as from Bank of England Governor Mark Carney who spoke at a conference alongside him, suggests at least two major central banks are poised to look beyond a week of financial-market turmoil brought on by fears that China’s economy is faltering.
The Dow Jones Industrial Average was down by 114.98 points or 0.69 percent to 16,528.03, the Nasdaq lost 51.82 points or 1.07 percent to 4,776.51, while the S&P 500 dropped by 16.69 points or 0.84 percent to 1,972.18.
The Indian ADRs ended mostly in red on Monday, HDFC Bank was down by 1.40%, Infosys was down 0.36%, Tata Motors was down 0.33% and ICICI Bank was down 0.15%. On the other hand, Dr. Reddy’s Lab was up 1.21%.
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