Dow Jones turns positive for the year as economists warn the global economic outlook has worsened

Billy Bambrough
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Traders cheer on the floor of the New York Stock E
Traders finally have reason to celebrate the new year (Source: Getty)

The US Dow Jones industrial average index has entered positive territory for 2016, erasing loses racked up earlier in the year.

The index is up around 0.1 per cent for 2016, after climbing almost one per cent today.

The Dow's recovery has been echoed in other US and European markets, though is in contrast to the worsening economic picture being painted by economists and central banks.

The S&P 500 is half a per cent so far today, just under its close on the last trading day of 2015.

The FTSE 100 is around 40 points off its 2015 close, up half a per cent today.

Chancellor George Osborne yesterday warned of "storm clouds gathering" in his annual Budget speech that cut economic growth expectations.

Figures by the Office for Budget Responsibility (OBR) downgraded UK economic growth from 2.4 per cent to two per cent in 2016, and to 2.2 per cent in 2017, from 2.5 per cent. It also cut its inflation forecasts to 0.7 per cent this year.

Meanwhile, the US Federal Reserve yesterday opted to keep interest rates on hold again after hiking in December. It also halved its projection of rate hikes for the rest of the year.

A rise in the oil price has given a boost to share prices, pushed further by renewed stimulus packages in Europe and Asia.

Read more: Has ECB president Mario Draghi's big bazooka forged a currency war ceasefire?

The oil price has added almost 50 per cent to its price since January lows of $27 per barrel. Brent crude climbed over the $40 mark in March and has now been joined by US benchmark West Texas Intermediate.

The price of Brent crude has today hit $41.30 a barrel, its highest since December last year.

The European Central Bank las week announced it would cut its deposit rate to minus 0.4 per cent and expanded its quantitative easing programme by €20bn to €80bn a month - which will run beyond the end of March 2017.

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