The Korean stock market is trading firm on Thursday with strong cues from Wall Street and the positive trend in other Asian markets aiding sentiment to a significant extent. Automobiles, banks, shipbuilders and steel makers are among the prominent gainers.
The Korean benchmark index KOSPI opened over 15 points up at 1,354 and rose to 1,372 as stock prices rallied sharply in morning trading. The index is currently trading at 1,376, up 37.17 points over its previous close.
Among automobiles, Kia Motors is up 4.3% now. Hyundai Motor and Ssangyong Motor are up by around 4% at present. Bank stocks are trading firm. Korean Exchange Bank is up nearly 5%. Woori Finance is trading 7.5% up and Shinhan Financial is up with a gain of 5.7%. KB Financial Group, the holding firm of Kookmin Bank, is up nearly 4.5%.
Market heavyweight Samsung Electronics is up 1.9%. Tech stocks Hynix Semiconductor and LG Display LCD are up 1.8% and 1.3%, respectively while LG Electronics is trading 4% up.
Among shipbuilders, Hyundai Heavy Industries and Samsung Heavy Industries are up 2.3% and 2.6%, respectively while Daewoo Shipbuilding is trading 1.6% higher than its previous close.
Among oil stocks, SK Holding is up 4.4%. S-Oil is trading with a gain of 1.2%. Energy stock KEPCO is up by over 1%. Steel makers Hyundai Steel and POSCO are up 4.5% and 1.5%, respectively.
Airlines stocks, which had suffered sharp losses in recent sessions, are currently trading firm. Korean Airlines is up 1.4%. Asiana Airlines is trading 2.5% up. Telecom stocks SK Telecom and KT Corp. are trading marginally higher. Bulk carrier STX Pan Ocean is up 2.7%.
The Korean market had closed on a positive note on Wednesday with the benchmark KOSPI moving up by 38.18 points or 2.94% to 1,338.42.
Among the other markets in the Asia- Pacific region, Australia, New Zealand, Hong Kong, Singapore, South Korea and Taiwan are trading firm with strong gains. The benchmark indices of these markets are up 2% - 6.5% at present.
Asian markets, barring the Japanese market which remained closed on account of Showa Day, had ended on a firm note on Wednesday. Major European markets also experienced substantial strength, with the U.K.'s FTSE 100 Index advancing 2.3 percent, while the French CAC 40 Index and the German DAX Index rose 2.2 percent and 2.1 percent, respectively.
In the U.S., GDP numbers fell short of expectations, but Wall Street investors shrugged off the data and picked up stocks so consistently that the market stayed in positive territory right through Wednesday.
The advance first-quarter GDP report indicated that the U.S. economy fell 6.1% between January and March, sharper than an expected drop of 4.7%. However, on hopes economic conditions will improve following a sharp rise in consumption level, participants remained active buyers during the session. Personal consumption climbed a better-than-expected 2.2% after dropping 4.3% in the fourth quarter, as the consensus called for an increase of 0.9%.
The FOMC kept the federal funds rate unchanged at 0.00% to 0.25%, as expected. Its quantitative easing targets were also unchanged. The FOMC's latest policy statement noted that household spending will continue to be pressured by job losses, decreased housing wealth, and tight credit conditions. The committee expects continued weak economic activity, but feels its policy actions combined with fiscal stimulus should help contribute to a gradual resumption of sustained economic growth.
Hope for an economic recovery in the second half of this year helped prop up oil prices. Oil prices gained 2.2% to close at $51.00 per barrel, despite a massive build of 4.05 million barrels during the week ending April 24.
On the corporate front, Bank of America was on investors' minds during the session as Chairman and Chief Executive Ken Lewis faced severe shareholder anger at the bank's annual meeting.
Ken Lewis was stripped of his title as chairman of Bank of America Corp. on Wednesday, but shareholders allowed him to retain the title of Chief Executive Officer. In a close vote, shareholders moved to split the two leadership positions, approving board member Walter Massey as new BofA Chairman.
The Dow closed up 168.79 points or 2.1 percent at 8,185.73, the Nasdaq closed up 38.13 points or 2.3 percent at 1,711.94 and the S&P 500 closed up 18.48 points or 2.2 percent at 873.64. With the upward moves, the Nasdaq ended the session at its best closing level in nearly six months, while the Dow set a more than two-month closing high and the S&P 500 set a three-month closing high.
In the bond market, treasuries showed a notable decline following the Fed announcement, closing near their lows of the day. Subsequently, the yield on the benchmark ten-year note ended the session up 9.4 basis points at 3.096 percent.
Earnings will determine the U.S. market's direction on Thursday with nearly 150 companies scheduled to announce their latest results. Initial jobless claims data and personal spending data for March are scheduled to be released.
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