One day after ending the four-day winning streak in which it added nearly 80 points or 2.6 percent, the South Korean stock market turned right back to the upside on Thursday. The KOSPI is closing on resistance at 1,340 points, and investors are expecting additional gains at the opening of trade on Friday.
The global forecast for the Asian markets is positive, thanks to better than expected earnings news on the corporate front - which may provide the technology and financial sectors with a lift. The United States also reported some economic news that beat expectations, sending Wall Street significantly higher. The European bourses also ended with sharp gains, and the Asian markets are expected to track higher as well.
The KOSPI finished slightly higher on Thursday, after more significant gains were pared in morning trade. Strength from the ship builders nudged the market into positive territory, although the gains were largely offset by weakness form the financials.
For the day, the index added 3.63 points or 0.27 percent to close at 1,336.72 after trading between 1,334.65 and 1,371.28. Volume was 733.5 million shares worth 8.8 trillion won, while gainers led decliners 475 to 333, with 72 stocks finishing unchanged.
Among the gainers, LG Electronics advanced 0.97 percent, while Hyundai Heavy Industries gained 2.87 percent, Samsung Heavy Industries advanced 0.96 percent, Daewoo Shipping was up 0.40 percent, SK Holdings advanced 2.56 percent, POSCO rose 4.1 percent and STX Pan Ocean gained 6.2 percent.
Finishing lower, Samsung Electronics was down 0.68 percent, while Hynix Semiconductor declined 1.49 percent, LG Display was down 0.32 percent, KB Financial Group declined 1.33 percent, Shinhan Financial fell 1.68 percent, Woori Finance lost 5.32 percent, Hyundai Motor fell 1.97 percent, Kia Motor lost 2.90 percent, Ssangyong Motor eased 1.23 percent, Hana Financial Group was down 5 percent and Korea Electric Power Corp (Kepco) lost 2.2 percent.
The lead from Wall Street is broadly optimistic as stocks moved sharply higher over the course of the trading session on Thursday, with the major averages all closing firmly in positive territory after seeing some earlier uncertainty. As was the case in the previous session, a late day rally contributed to the higher close.
In corporate news, financial services giant JP Morgan (JPM) released its first quarter financial results before the start of trading, reporting earnings that fell year-over-year but came in above analyst estimates. JP Morgan reported first-quarter net income of $0.40 per share compared to $0.67 per share in the year ago quarter. Analysts had expected the company to report earnings of $0.32 per share. Revenues also came in better than expected.
Additionally, mobile phone giant Nokia (NOK) generated some buying interest after the company reported first quarter earnings that fell sharply year-over-year but said it expects second quarter worldwide mobile device volume to be flat or show modest sequential growth.
On the economic front, a Commerce Department report showed that housing starts fell 10.8 percent to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month.
Meanwhile, the Labor Department said initial jobless claims fell to 610,000 from the previous week's revised figure of 663,000. Economists had expected jobless claims to edge up 658,000 from the 654,000 originally reported for the previous week. However, continuing claims rose to a new record high.
Separately, the Philadelphia Federal Reserve said its index of regional manufacturing activity rose to a negative 24.4 in April from a negative 35.0 in March. While a negative reading indicates a contraction in the sector, the index increased by much more than expected.
The major averages moved off their best levels of the day going into the close but still ended the day sharply higher. The Dow closed up 95.81 points or 1.2 percent at 8,125.43, the NASDAQ closed up 43.64 points or 2.7 percent at 1,670.44 and the S&P 500 closed up 13.24 points or 1.6 percent at 865.30. With the gains, the Dow and the S&P 500 ended the session at their best closing levels in over two months, while the tech-heavy NASDAQ finished the day at its best closing level since early November of 2008.
In economic news, South Korea's Ministry of Trade and Finance said on Thursday that exports are expected to shrink 16 percent during 2009 to $354.5 billion from $422 billion reported for last year. Attributing a protracted global slowdown as the primary reason, the ministry noted that imports into the country might also shrink 21 percent from last year.
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