US markets closed higher as oil rallies

The US markets closed higher on Tuesday, as investors scooped up bank and technology stocks, highlighting a renewed appetite for assets considered risky as oil stormed higher. It was the best one-day percentage gain for the S&P 500 and the Dow since January 29. Also, the S&P 500 saw its best March start since 2002. Former Federal Reserve Chairman Alan Greenspan came out against negative interest rates as a tool for the US central bank, saying they would be non-productive and would warp investment. Greenspan stated that there are so many huge unknowns in the global economic outlook at the moment. He cited the outlook for the dollar and China’s economy.

On the economy front, the February data add to signs of distress in the US manufacturing economy. Markit’s manufacturing Purchasing Managers Index (PMI) came in at 51.3. It recorded the weakest rise in manufacturing output since October 2013. Clients spent prudently because they lacked confidence in the business outlook, and so volumes of new work grew at a sluggish pace. The Institute for Supply Management stated that its manufacturing index rose to 49.5% last month from 48.2% in January. But readings under 50% indicate more companies are cutting back instead of expanding their businesses. Manufacturers have been dinged by a strong dollar, weak exports and fewer orders from a US energy industry struggling with cheap oil prices.

The Dow Jones Industrial Average added 348.58 points or 2.11 percent to 16,865.08, the Nasdaq was up 131.65 points or 2.89 percent to 4,689.60 while, the S&P 500 gained 46.12 points or 2.39 percent to 1,978.35.   

The Indian ADRs closed in green; HDFC Bank was up 2.88%, Tata Motors was up 1.50%, Dr. Reddy’s Lab was up 0.67%, Infosys was up 0.60% and ICICI Bank was up 0.45%.