US Markets ended higher on 17 March 2010

The US markets moved higher for the third straight session & hit a fresh 52-week high along the way. Though the latest advance was broad based, they couldn’t propel the S&P 500 past near-term resistance at the 1170 line.

Renewed pledge from the Fed for low rates and a drop in inflation at the producer level helped fuel the market’s momentum. Producer prices for February fell 0.6%, which was a sharper drop than expected, but core prices climbed a tame 0.1%, as expected.

The seven-day rally, the Dow’s longest streak in over a year, pushed the blue-chip index up 4%. All three major indexes – the Dow, S&P 500 and Nasdaq – today logged their highest closing levels since 2008.

A positive bias among broader market participants has taken volatility down considerably. The volatility index dropped to a 22-month low. It closed down 5%.

The dollar fell initially and the euro touched a five-week high against the dollar before erasing gains. Eventually the dollar index rebounded back near the unchanged line.

Crude climbed to a 10-week high after the US government reported that imports fell to a seasonal low and fuel inventories dropped more than analysts forecast. Prices surge 1.5% higher at $ 82.93 per barrel.

Base metals held at firmer levels near intraday highs, copper rose extending an advance from a two-week low, as the dollar declined, increasing demand for the metal as an alternative investment. Most other base metals are also in positive territory.

Indian ADRs ended mostly in green on Wednesday. In IT space, Wipro was up 3.28% at $ 24.21, Infosys was up 1.7% at $ 61.14 and Patni Computers was up 0.3% at $ 23.17 while Satyam Computers was down 0.95% at $ 5.23.

In Banking space, ICICI Bank was up 2.55% at $ 42.55 and HDFC Bank was up 0.34% at $ 131.23. In Telecom space, Tata Communication was unchanged at $ 12.57 while MTNL was down 1.23% at $ 3.21.

In other sectors, Dr Reddy’s Labs was up 2.53% at $ 27.54, Tata Motors was up 1.46% at $ 18.77 and Sterlite Industries was up 0.87% at $ 18.58.

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