The US markets continued its recent losing streak on Thursday, falling further from multi month lows in more than three months, as investors gauged the economic impact of super storm Sandy and the risk of going over the so-called fiscal cliff. Investors have also started eyeing an event where President Barack Obama on Friday will gather with Democratic and Republican congressional leaders to start negotiations to reach a deficit-reduction deal. On economy front, a report showed that manufacturing in the New York region contracted in November as the storm took out power and curbed activity, and economic activity also declined this month in the Philadelphia area. Besides, the number of Americans who sought unemployment benefits last week jumped to an 18-month high, largely a side-effect of the super storm that battered parts of the East Coast. First-time jobless claims soared by 78,000 to a seasonally adjusted 439,000 in the week ended November 10, the Labor Department stated. Basically applications surged in the parts of the country that lay in the path of Hurricane Sandy. Separately, the US consumer price index increased 0.1% in October after rising 0.6% in September, according to a report released by the US Labor Department. Excluding food and energy prices, the core consumer price index rose 0.2% in October after gaining 0.1% in September.
Meanwhile, the Federal Reserve is asking 30 big banks to make sure their capital can withstand a deep recession in which the unemployment rate rises to 12%. The Fed, which first required big banks to conduct stress tests in 2009, laid out three scenarios lenders have to test against. The goal is to ensure that the firms have enough capital to continue operations during stressful economic times. Also, Federal Reserve Board Chairman Ben Bernanke stated that, mortgage lending standards now appears to be overly tight, and are preventing creditworthy borrowers from buying homes.
In Europe, Italian Finance Minister Vittorio Grilli is confident that euro-region finance chiefs will reach an agreement on aiding Greece when they meet next week. Greece was granted an additional two years to reach budget- deficit goals in its bailout program. European finance ministers will be discussing ways of plugging the funding gap resulting from that extension at a November 20 meeting in Brussels. Besides, inflation in the euro area fell in October, final data released by statistics office Eurostat showed. Euro area annual inflation fell to 2.5% in October from 2.6% in September. A year earlier the rate was 3% and monthly inflation was 0.2% in October.
The Dow Jones Industrial Average lost 28.57 points, or 0.23 percent, to close at 12,542.40, the S&P 500 finished down by 2.16 points, or 0.16 percent at 1,353.33, while the Nasdaq ended lower by 9.87 points, or 0.35 percent to settle at 2,836.94.
Indian ADRs closed mixed on Thursday, Tata Motors was down 0.38%, Dr. Reddy’s Lab was down 0.27% and ICICI Bank was down 0.18%. On the other hand, Tata Communication was up 0.18% and Infosys was up 0.15%.
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