The US markets closed mostly higher on Monday, after dipping in and out of negative territory as a deepening rout in oil prices hit the energy sector on the heels of the worst weekly start ever to a new year. The S&P 500 and Dow Jones Industrial Average snapped a three-day losing streak, bouncing after posting the largest declines for the first five days of a new calendar year in history. Dallas Fed President Robert Kaplan stated that the US energy sector will see more bankruptcies, mergers and restructurings this year given the outlook for continued low oil prices. The overall tone in the oil and gas sector has soured, as expectations have decidedly shifted to an even lower for even longer price outlook in the wake of the December OPEC meeting. Kaplan added that given the various cross-currents, the ultimate timing of reaching market production/consumption balance remains uncertain. Kaplan is not a voting member of the Fed policy committee this year. He enlightened that he was in favor of the December interest-rate increase, the first since 2006.
Meanwhile, Atlanta Federal Reserve Bank President Dennis Lockhart stated that there may not be enough fresh data on inflation that help give shape to the Fed’s possible rate path to support a second US interest rate increase in January or March. Lockhart added that international problems such as the slowdown in China and continued low oil prices are now the chief risks to what is an otherwise promising outlook for the US economy. He remains mildly optimistic that strong domestic consumption will help spur US GDP growth of as much as 2.5% this year, enough to push the economy to full employment and eventually boost inflation.
The Dow Jones Industrial Average added 52.12 points or 0.32 percent to 16,398.57, the S&P 500 was up 1.64 points or 0.09 percent to 1,923.67 while the Nasdaq was down 5.64 points or 0.12 percent to 4,637.99.
The Indian ADRs closed mixed; HDFC Bank was up 0.97%, Tata Motors was up by 0.87% and Infosys was up 0.08%. On the other hand, Dr. Reddy’s Lab was down 1.61% and Wipro was down by 0.21%.
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