Updated March 27 at 1:27pm

Dow average reaches 16,000 after China rally while gold retreats

Stocks rose, with the Dow Jones Industrial Average reaching 16,000 for the first time, as China’s pledge to expand economic freedoms spurred speculation the country is headed toward more sustainable growth. More

To continue reading this article, please do one of the following.



Sign up to receive Providence Business News' newsletters
and breaking news alerts.  

economic indicators

Dow average reaches 16,000 after China rally while gold retreats

Posted:

NEW YORK - Stocks rose, with the Dow Jones Industrial Average reaching 16,000 for the first time, as China’s pledge to expand economic freedoms spurred speculation the country is headed toward more sustainable growth. European shares extended the longest rally in 15 months, while gold fell.

The Dow climbed 62.61 points to 16,024.31 at 9:33 a.m. in New York and the Standard & Poor’s 500 Index topped 1,800 for the first time. The Hang Seng China Enterprises Index climbed 5.7 percent in Hong Kong, the most in almost two years. Brazil’s real and India’s rupee appreciated more than 1 percent against the dollar, which dropped against all but one of its 16 major counterparts. U.S. interest-rate swaps slid to the least in a year relative to Treasury note yields. Gold dropped 0.6 percent and oil slipped.

China’s leaders vowed to allow more private investment in state-controlled industries and expand farmers’ land rights as part of the ruling Communist Party’s biggest package of economic reforms since the 1990s.

“The initial reaction to the Chinese communication was a negative one, but as we’re getting more detail, it looks like this is a revolutionary change,” Nader Naeimi, the Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion, told Bloomberg Television. “We’re starting to get optimism coming through the market. The turnaround in sentiment and the improving macro data should push the equity market higher into 2014.”

China outlook

The MSCI Emerging Markets Index rose 1.9 percent, the most in two months. The Shanghai Composite Index climbed 2.9 percent. India’s Sensex advanced 2.2 percent, and benchmark gauges in Brazil, Indonesia, Turkey, Poland and the Czech Republic advanced at least 1 percent.

China’s plan will guide the country toward a market-based economy, “significantly” raise its growth potential and help reduce macro risks, Jun Ma, chief economist at Deutsche Bank AG in Hong Kong, wrote in a report today. “We expect a 20-25 percent upside to the MSCI China” index in the next 12 months, Jun wrote.

China’s interest-rate swaps touched a five-month high. The country will accelerate convertibility of the yuan along with the freeing-up of interest rates, according to the party statement Nov. 15.

“We believe China is on the cusp of a massive multiyear bull run,” Christie Ju, managing director at Jefferies Group LLC in Hong Kong, wrote in a note to clients.

record dow jones industrial average, 16, 000, hang seng china enterprises index, more sustainable growth in china, economic reform in china, more private investment in china
Next Page

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment
Latest News