One day after snapping the six-day winning streak that saw it collect more than 100 points or 8.5 percent en route to a six-month closing high, South Korean stock market turned right back to the upside. The KOSPI regained the 1,300-point plateau one day after giving it up, and now investors are looking to add to those gains on Friday.
The global forecast for the Asian markets is broadly optimistic, with strong gains expected among the financial stocks after better than expected corporate results from banking giant Wells Fargo. Some solid economic news out of the United States adds to the positive sentiment. The European and U.S. markets finished sharply higher, and the Asian bourses are also expected to move significantly to the upside.
The KOSPI finished sharply higher on Thursday, fueled by gains among the technology stocks, financial issues and industrial shares.
For the day, the index surged 54.28 points or 4.30 percent to close at 1,316.35 after trading between 1,272.02 and 1,317.29. Volume was 920 million shares worth 8.95 trillion won. There were 780 gainers and 109 decliners.
Among the gainers, Samsung Electronics advanced 4.13 percent, while Hynix Semiconductor added 0.61 percent, LG Electronics advanced 3.68 percent, LG Display gained 2.86 percent, KB Financial Group surged 7.21 percent, Shinhan Financial soared 8.51 percent, Woori Finance rose 14.96 percent, Hyundai Heavy Industries gained 2.76 percent, Samsung Heavy Industries advanced 5.20 percent, Daewoo Shipping added 4.35 percent, Hyundai Motor soared 8.80 percent and Kia Motor gained 5.90 percent. Bucking the trend, Ssangyong Motor declined 4.02 percent.
The lead from Wall Street is fairly positive again as better sentiment toward the financial sector and encouraging economic news drove stocks substantially higher on Thursday, allowing Wall Street to close out the holiday-shortened week on a high note.
Strong preliminary results from Wells Fargo (WFC) gave hope that the financials were not a lost cause, and some better-than-expected economic data contributed to the improved sentiment. Wells Fargo released preliminary first quarter results that crushed what analysts were expecting. The company said it now expects to report first-quarter earnings of $3 billion or $0.55 per share compared to analyst estimates of $0.23 per share.
Additionally, Barclays plc (BCS) helped lead financials higher after the company announced an agreement for the sale of its iShares business to Blue Sparkle LP, a new limited partnership established by CVC Capital Partners Group SICAV-FIS S.A. The purchase price for the deal was about $4.4 billion.
In economic news, a report from the Labor Department showed that jobless claims fell to 654,000 from the previous week's revised figure of 674,000. Economists had expected jobless claims to edge down to 660,000 from the 669,000 originally reported for the previous week. However, the Labor Department also said that continuing claims rose to a new record high of 5.840 million in the week ended March 28th from the preceding week's revised level of 5.745 million.
Additionally, the Commerce Department said that the U.S. trade deficit narrowed to $26.0 billion in February from $36.2 billion in January. Economists had been expecting the trade deficit to come in at $36.0 billion.
The Dow finished the week above the 8,000 mark after a bout of profit-taking earlier in the week sparked doubt about the market's ability to hold this level. Trading is closed on Friday for the Good Friday holiday. The Dow closed Thursday's trading higher by 246.27 or 3.14 percent at 8,083.38. The NASDAQ ended the session with a gain of 61.88 or 3.89 percent at 1,652.54 and the S&P 500 was up 31.40 points or 3.81 percent by the market close, at 856.56.
In economic news, the Bank of Korea on Thursday voted to keep interest rates on hold, maintaining the record low of 2.00 percent - in line with expectations. Before also holding rates at the March 12 meeting, the bank had trimmed rates by 50 basis points to 2 percent on February 12, marking the sixth rate cut in the previous four months.
Also, South Korea's producer price index rose 3.5 percent year-on-year in March, at a slower pace compared to a 4.4 percent rise in the previous month, the Bank of Korea said Thursday. This marks the slowest rise in producer prices since a 3.1 percent increase in November 2007. Month-on-month, producer prices were up 0.5 percent in March compared to a 0.6 percent increase in February.
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