The Dow Jones Industrial Average index which is one of the most closely watched global indices hit a 5-month high on Wednesday. The index climbed 187.03 points, or 1.06 per cent, to 17908.28 on April 13. It opened at 17,741.66 and touched a high and low of 17,918.35 and 17,741.66 respectively in trade. The 30-share index was at 17,910.33 on November 6, 2015.
On a year-to-date basis, the index soared by 759 points, or 4.43 per cent till April 13.
Below are 5 reasons which took Dow to its 5 months high:
1) Value Buying: Dow plummeted over 10 per cent between November 2, 2015 and February 11, 2016. The index fell to 15660.18 from 17828.76. G Chokkalingam, founder, Equinomics Research & Advisory, said, “Some buying at lower levels supported American markets in the past few months.”
2) Chinese Export Data: Upbeat Chinese international trade data offered hope that Asia’s biggest economy is finally stabilising. China’s reported exports jumped 11.5 percent year on year in March, the first increase since June, well above market forecasts.
3) Oil Prices: Brent crude oil prices hit a four-month high on April 12 and energy stocks rose on Tuesday after reports of an agreement between two major producers to freeze output, leading US equities higher. Crude oil prices surged 20 per cent to $44.69 per barrel on April 12 from $37.22 per barrel on January 4. “Recovery in oil prices are positive for global markets. Rise in oil prices is a sign of boom in global economy which shows rise of aggregate demand in world. Increase in oil prices beyond a limit can be negative also,” said Chokkalingam.
4) Government spending: In the past six months, government spending totalled $1.937 trillion, 4.2 per cent higher than the first half of 2015.
5) Positive global cues: According to market experts, rise in global markets also supported market sentiments.
(With agency inputs)