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March 5 (Agencies): The Dow Jones Industrial Average today hit a record high to lead global equity markets higher on bets on global growth after China announced record spending this year, while commodity prices also advanced.
Outgoing Chinese Premier Wen Jiabao announced the spending, aimed at sustaining growth in the world’s secondlargest economy, while China’s new rulers were set to focus on consumer-led growth to narrow the gap between rich and poor.
On Wall Street, the Dow hit the highest level by breaking the previous intra-day record of 14198.10 set on October 11, 2007.
“It is meaningful in the sense it obviously has a lot of media potential — it’s likely to move stories about the stock market to the front page from the financial section. From that point of view it is good news in that it tends to lift spirits or raise confidence,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.
“There is the wealth effect of the fact that when you start to lift confidence it leads to stronger consumer spending. From that point of view it will have positive feedback on the economy.”
Back home, an across-the-board buying on strong global cues and indications of more sops by finance minister P. Chidambaram lifted the Sensex by over 265 points — its biggest gain in this year — to end at 19143.17. Helped by gains in realty, metal and banks, the Sensex spurted 265.21 points, or 1.40 per cent, to close at 19143.17, recording its biggest single day gain since November 29, 2012.
An MSCI gauge of global equities rose 1 per cent and European shares bolted 1.6 per cent higher.
Even as the Dow hit a record high, its Eurozone peer, the blue chip Euro STOXX 50 still needs to gain 71 per cent to reach its June 2007 top.
In the oil market, Brent crude bucked a five-day losing streak to rise to $111 a barrel, as the North Sea Brent pipeline remained closed for a third day and investors bet on strong Chinese oil demand.
The Dow Jones rose 139.26 points, or 0.95 per cent, to 14261.45, the S&P 500 gained 15.99 points, or 1.05 per cent, to 1541.24 and the Nasdaq Composite added 39.69 points, or 1.20 per cent, to 3222.12.
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