US markets closed lower on Wednesday

The US markets closed lower on Wednesday, despite trimming heavier losses scored earlier in the session as a modest bounce off session lows by crude-oil prices provided some relief. The stock-market rout came as equities racked up sharp losses world-wide, fueled by oil falling below $27 a barrel and worries over an economic slowdown in China and other developing markets. On the economy front, consumer prices fell again in December owing mostly to falling costs of food and gasoline. The consumer price index declined by seasonally adjusted 0.1% last month. For all of 2015 inflation rose just 0.7%, the second slowest rate in 50 years. The low rate was largely the result of the biggest drop in gasoline prices in more than a decade. The cost of food also tapered off toward the end of the year because of falling prices for agricultural goods. In December, energy prices dropped 2.4% and food costs retreated 0.2%. Stripping out food and energy, so-called core prices rose 0.1% in December. Despite the decline consumer prices in December, inflation no longer appears to be receding. Over the past 12 months the CPI has risen at a 0.7% rate, the highest year-over-year gain since the end of 2014. The annual rate of inflation had briefly turned negative in early 2015. The real or inflation-adjusted hourly wages increased 0.1% in December. Real wages have risen 1.8% in the past 12 months.

Meanwhile, home builders cut back slightly on new construction in the final month of 2015, though they built the most homes last year since 2007. So-called housing starts fell 2.5% last month to an annual rate of 1.15 million. Yet for the full year home builders started work on 1.11 million new houses, the largest number since the Great Recession. Starts climbed nearly 11% compared to 2014. Requests for new building permits, meanwhile, slipped 3.9% to an annual rate of 1.23 million in December. But the increase in permits was also the strongest in 2015 since the Great Recession.

The Dow Jones Industrial Average lost 249.28 points or 1.56 percent to 15,766.74, the Nasdaq was down 5.26 points or 0.12 percent to 4,471.69 while the S&P 500 dropped 22.00 points or 1.17 percent to 1,859.33. 

The Indian ADRs closed mostly in red; HDFC Bank was down 2.03%, Tata Motors was down 1.14%, Dr. Reddy’s Lab was down 0.75% and Infosys was down 0.06%. On the other hand, Wipro was up by 0.11%.