The US markets rallied on Tuesday, with the best gains this year as the S&P 500 closed at a record high for the 49th time in the past 12 months. The risk appetite returned on the street after tensions eased following President Vladimir Putin stating that Russia has no plans to take over the region, though he stressed that Moscow reserves the right to use military force to protect Russian speakers in Ukraine. On the economy front, CoreLogic’s Home Price Index showed that home prices nationwide, including distressed sales, increased 12% in January 2014 compared to January 2013. This marks 23 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 0.9% in January 2014 compared to December 2013. The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.
Meanwhile, President Obama released his fiscal year 2015 budget proposal. The $4 trillion proposal, which is not expected to pass by Congress, includes more generous tax breaks for working families while scaling back breaks for the rich. As expected, the White House stated that Obama’s blueprint sticks to the top line spending limits already set by the House and Senate for 2015. The White House Budget Office estimates that Obama’s proposal overall would cut the annual deficit by 2024 to 1.6% of the size of the economy, less than half of where it’s projected to be that year under current policies by the Congressional Budget Office.
The Dow Jones Industrial Average added 227.85 points or 1.41 percent, to 16,395.88, the Nasdaq Composite was up by 74.67 points or 1.75 percent, to 4,351.97 while, the S&P 500 gained 28.18 points or 1.53 percent, to close at 1,873.91.
The Indian ADRs closed in green on Tuesday; Infosys was up by 1.94%, ICICI Bank was up by 1.20%, Dr. Reddy’s Lab was up 1.01%, HDFC Bank was up 0.99% and Tata Motors was up 0.51%.