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US markets drop on weak Chinese economic data

16 Apr 2013 Evaluate

The US markets fell the most in five months on Monday, after reports from China showed that industrial giant’s growth had cooled. The Chinese economic data released, including first-quarter growth, came in weaker than expected. Gross domestic product for the January-March quarter rose 7.7% from a year earlier, weakening from 7.9% growth in the fourth quarter. The sell-off further accelerated in afternoon following the news of explosions at the Boston Marathon. Meanwhile, Vice Chair of the Board of Governors of the Federal Reserve Janet Yellen stated that progress on reducing unemployment should take center stage for the FOMC, even if maintaining that progress might result in inflation slightly and temporarily exceeding 2%.

On the economy front, the manufacturing activity nudged higher in the New York region in April, according to a survey released that reinforces other data points showing the US economy is entering a spring slowdown. The New York Fed’s Empire State index fell to 3.1 points in April from 9.2 in March. On the other hand, a gauge of confidence among home builders fell in April for a third month of declines, hitting the lowest level in six months, hurt by weaker views on present sales of single-family homes and prospective-buyer traffic, according to the National Association of Home Builders/Wells Fargo housing-market index released. The overall builder-confidence index decreased to 42 in April from 44 in March.

The Dow Jones Industrial Average lost 265.86 points or 1.79 percent to 14,599.20, the S&P 500 slipped 36.49 points or 2.30 percent to 1,552.36 and the Nasdaq dropped 78.46 points or 2.38 percent to 3,216.49.

The Indian ADRs closed in red on Monday, Infosys was down 1.39%, Tata Motors was down 1.21%, Dr. Reddy’s Lab was down 0.85%, ICICI Bank was down 0.45% and Sterlite Industries was down by 0.40%.

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