US markets closed higher on oil rally

The US market closed higher on Tuesday, as oil settled higher for a third day in a row and at its highest price of the year. After a wobbly start to the day, oil futures spiked on hopes that key oil producers will agree on an output freeze at their meeting this Sunday. Meanwhile, Richmond Fed President Jeffrey Lacker stated that the US central bank should stick with its earlier plan to raise interest rates four times this year. In December, when the Fed raised interest rates for the first time in almost a decade, it signaled a desire to raise interest rates four times this year. But the US central bank pulled back their projections to two rate hikes in March, in light of global weakness and financial market turmoil. Lacker added that the December plan still had his support and the US central bank has often responded to financial market developments that turned out, with hindsight to be false signals. Lacker noted that the adverse financial market developments that led the Fed to pause in March have largely reversed. Lacker is not a voting member of the Fed’s policy committee this year. He is seen as one of the more hawkish Fed officials, having pressed the US central bank to raise interest rates last fall. Philadelphia Fed President Patrick Harker stated that it makes sense to delay another interest-rate increase until inflation picks up. Harker isn't a voting member of the Fed’s policy-setting committee this year.

On the economy front, the federal government’s budget deficit rose sharply in March, pushing the deficit for the first six months of this budget year above the same period a year ago. The deficit for March totaled $108.0 billion. That marks the biggest March deficit in four years and was more than double the imbalance in March 2015. The large jump from a year ago reflected calendar shifts, which had made the 2015 deficit look smaller because $36 billion in benefit payments were shifted into February. Through the first six months of this budget year that began on October 1, the deficit totals $461.0 billion. That represents an increase of 4.9 percent from the same period a year ago. The Congressional Budget is forecasting a higher deficit for the full year. So far this budget year, government receipts total $1.476 trillion, up 4 percent from the same period a year ago. Government spending totals $1.937 trillion, 4.2 percent higher than the first half of 2015. US small business confidence fell to a fresh two-year low in March amid persistent worries about sales and profits, the latest indication that economic growth braked sharply in the first quarter. The National Federation of Independent Business (NFIB) stated that its small business optimism index dipped 0.3 point to a reading of 92.6 last month, the lowest since February 2014. It has declined from a reading of 100 in December 2014 and has pushed further off its 42-year average of 98.

The Dow Jones Industrial Average added 164.84 points or 0.94 percent to 17,721.25, Nasdaq was up by 38.69 points or 0.80 percent to 4,872.09 while, S&P 500 gained 19.73 points or 0.97 percent to 2,061.72.

The Indian ADRs closed in green; HDFC Bank was up 0.89%, Dr. Reddy’s Lab was up 0.74%, Tata Motors was up 0.62%, ICICI Bank was up 0.38% and Wipro was up 0.11%.