The US markets closed higher on Wednesday, after the Federal Reserve left monetary policy unchanged but signaled that a rate increase is still on the table at its next meeting in December. The main indexes initially dipped into negative territory immediately after the Fed announcement, but bounced back to rally into the close. The Fed stated that it would determine whether it will be appropriate to raise the target range at its next meeting. Fed officials repeated that they want to see some continued progress on labor markets and be reasonably confident inflation is rising toward their 2% annual target before hiking rates. The Fed voted 9 to 1 to leave rates in a range between zero and 0.25% where they have been since December 2008. The lone dissenter was Richmond Fed President Jeffrey Lacker, who for the second meeting called for a rate hike. The Fed added that risks to the outlook remain nearly balanced but policymakers would be monitoring global economic and financial developments. However, the central bank did downgrade concern about China and emerging markets from the September statement. Upcoming economic indicators, including two employment reports, will be key ahead of the next Federal Open Market Committee meeting that ends on December 16.
On the economy front, an early look at US trade patterns in September signals a big drop in the nation’s trade deficit. The trade gap in goods - services are excluded - fell nearly 13% to $58.6 billion in September. The seasonally adjusted deficit in goods had shot up to a revised $67.2 billion in August from $59.1 billion in July. The government will release overall trade numbers for September on next Wednesday, but the size of the trade deficit is generally tied to changes in exports and imports of goods. The government reported last month that the total US trade deficit in August rose to a five-month high of $48.3 billion, as exports fell to a three-year low.
The Dow Jones Industrial Average added 198.09 points or 1.13 percent to 17,779.52, Nasdaq was up 65.54 points or 1.30 percent 5,095.69 while, the S&P 500 gained 24.46 points or 1.18 percent to 2,090.35.
Indian ADRs ended mixed, Tata Motors was up 0.48%, Wipro was up by 0.13% and Infosys was up 0.10%. On the other hand, Dr. Reddy’s Lab was down 2.33% and HDFC Bank was down by 0.72%.
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