The US markets closed higher on Monday, as solid economic data offset concerns about Europe’s stability in the wake of a rejection of Italy’s vote on Sunday to reform existing constitutional rules. The broader stock market rose after a survey showed that the services side of the economy grew at its fastest pace in November in a year. The Institute for Supply Management said its nonmanufacturing index rose to 57.2% last month from 54.8%. Any reading over 50% signals that more businesses are expanding instead of contracting. Fourteen of the 18 service sectors tracked by the ISM expanded in November. Still, most services companies continue to hire new workers at a healthy pace. A gauge that measures employment climbed to 58.2% from 53.1%, marking the highest level in 16 months. US stocks jumped in November as investors bet that fiscal policies of President-elect Donald Trump’s administration, such as tax cuts and infrastructure spending, will help to boost the economy.
Meanwhile, Fed Member William Dudley stated that he backs gradual tightening with economy is expected to accelerate. The Federal Reserve Bank of New York chief added that the US economy is seen growing above its sustainable long-term rate. But the Fed member said short-term rates should be pushed up gradually. Dudley noted market participants now anticipate fiscal policy will turn more expansionary under Trump presidency. If that is the case, the FOMC will likely respond by tightening monetary policy a bit more quickly than previously anticipated.
The Dow Jones Industrial Average added 45.82 points or 0.24 percent to 19,216.24, Nasdaq was up 53.24 points or 1.01 percent to 5,308.89, while S&P 500 gained 12.76 points or 0.58 percent to 2,204.71.
The Indian ADRs closed mostly in green; Dr. Reddy’s Lab was up 0.43%, HDFC Bank was up 0.40%, Tata Motors was up by 0.20% and Infosys was up 0.03%. On the other hand, Wipro was down 0.06%.