US markets decline on concern over fiscal-cliff

The US markets fell to multi-month lows on Wednesday as worries about the US fiscal cliff increased the markets anxiety offsetting gains in the tech sector. Cisco Systems Inc., the computer-networking-equipment maker surprised the market by beating top- and bottom-line estimates. In Washington President Barack Obama is to begin negotiating a budget deal with Congress to prevent more than $600 billion in automatic tax hikes and spending reductions slated to begin in January. On the data front, the US retail sales declined in October for the first time in four months, impacted by the deadly storm Sandy that flooded and shut off power in parts of the Northeast. The 0.3 percent drop followed a 1.3 percent increase in September that was larger than previously reported, Commerce Department figures showed. Separately, wholesale prices also fell in October, down 0.2%, as the cost of energy fell.

Besides, a number of Federal Reserve officials stated that the central bank may need to expand its monthly purchases of bonds next year after the expiration of Operation Twist, according to minutes of their last meeting. Operation Twist is set to expire at the end of December, as the central bank will have nearly exhausted its holdings of short-term debt. The minutes suggest the FOMC may begin outright purchases of around $45 billion a month of Treasuries to maintain the current pace. The minutes also showed a detailed discussion about whether the central bank should link its policy of holding the main interest rate at zero to numerical measurements of unemployment and inflation, an approach that participants generally favored over the current approach of specifying a calendar date through which rates will remain low.

In Europe, Finance ministers of the euro area are scheduled to meet on November 20 for finalization of the next tranche of the Greek loans. General strikes across Europe have paralyzed the region with unions in Spain and Portugal protesting against the austerity measures. Greece, Italy and France too contemplated strikes against the fresh austerity measures. Besides, seasonally adjusted industrial production fell 2.5% in the euro area in September compared with August and by 2.3% in the EU27, according to estimates released by Eurostat, the statistics office of the European Union. Separately, the UK gross domestic product is estimated to have increased 1% in the third quarter, according to the quarterly Inflation Report published by the Bank of England.

The Dow Jones Industrial Average lost 185.23 points, or 1.45 percent, to close at 12,571.00, the S&P 500 finished down by 19.04 points, or 1.39 percent at 1,355.49, while the Nasdaq ended lower by 37.08 points, or 1.29 percent to settle at 2,846.81.

Indian ADRs closed mostly in red on Wednesday, HDFC Bank was down by 0.72%, ICICI Bank was down 0.55%, Infosys was down 0.37% and Tata Motors was down 0.31%. On the other hand, Sterlite Industries was up by 0.02%.