The US markets rallied on Thursday, with all three major indexes closing at the highest levels of over four years, after European Central Bank President Mario Draghi delivered on his promise to protect the euro and outlined a large bond-buying plan. On the domestic front too, a handful of reports on unemployment and hiring showed an improvement in the job market and help the markets sustain gains. The seasonally adjusted weekly jobless claims for the week ending September 1 decreased 12,000 to 365,000, from the previous week’s revised figure of 377,000. The 4-week moving average was 371,250, an increase of 250 from the previous week’s revised average of 371,000. Besides, a gauge of activity in the services industry also came in better than anticipated. The growth of economic activity among US services industries ticked up in August, with a rebound in employment while production growth slowed, according to data released by the Institute for Supply Management. The ISM non-manufacturing index ticked higher to 53.7% in August, slightly higher from a reading of 52.6% in July. Separately, US private sector employment rose more than estimated in August, according to a report released by Automatic Data Processing. The employment in the US non-farm private business sector on a seasonally adjusted basis increased 201,000 in August following a revised increase of 173,000 jobs in July.
In Europe, the ECB President Mario Draghi stated that policy makers agreed to unlimited bond purchases as the central bank looked to gain the upper hand on borrowing costs in debt-stricken euro nations. Draghi reiterated that central bank is prepared to buy government bonds in unlimited quantities in order to eliminate harmful distortions in financial markets fueled by fears of a euro breakup, but reiterated that participating countries must promise to abide by strict conditions. Besides, the central bank held rates at 0.75% and the Bank of England policymakers maintained the quantitative easing program at £375 billion and also left the key rate unchanged at 0.5%.
The Dow Jones industrial average gained 244.52 points, or 1.87 percent, to 13,292.00. The S&P 500 Index gained 28.68 points or 2.04%, to 1,432.12, while the Nasdaq Composite was up by 66.55 points, or 2.17 percent, to 3,135.81.
The Indian ADRs closed mostly in green on Thursday, Infosys was up 2.28%, ICICI Bank was up 1.06%, HDFC Bank was up 0.89% and Tata Motors was up 0.67%. On the other hand, Dr. Reddy’s Lab was down 0.07%.
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