The Korean stock market is trading firm on Monday with participants picking up shares of banking, steel and shipbuilding firms. Cues from Wall Street are not any significantly encouraging but investors appear to be be betting on hopes of an economic revival.
The Korean benchmark index KOSPI opened at 1,386 and rose to 1,392 in early trading and is currently up 21.23 points or 1.55% at 1,390.
Among automobile stocks, Kia Motor and Hyundai Motor are trading higher by 1.8% and 2%, respectively, while Ssangyong Motors is trading with a marginal loss.
Steel maker Hyundai Steel is up with a sharp gain of 4.5%. POSCO is up nearly a per cent. In the banking space, Shinhan Financial Group and Woori Finance are up by over 9%. Korea Exchange Bank is up 4.6% while KB Financial, the holding firm of Kookmin Bank is trading nearly 12% up.
Among shipbuilders, Hyundai Heavy Industries is up 2.2%. Samsung Heavy Industries and Daewoo Shipbuilding are trading higher by 3.2% and 3.5% respectively.
Airline stocks are trading firm, with Korean Airline moving up by 3.2% and Asiana Airline gaining 1.3%. Tech stock Hynix Semiconductor is down marginally. LG Display LCD is trading 0.6% down and LG Electronics is up by around half a per cent.
Among oil issues, SK Holdings is trading 1.7% up. S-Oil is down 0.5%. Energy stock KEPCO is up 2.2% over its previous closing price. Market heavyweight Samsung Electronics is down 1.5%. Telecom stocks SK Telecom and KT Corp are trading weak.
Other markets in the Asia-Pacific region are also trading firm. The Australian All Ordinaries index is up 68.50 points now. New Zealand's NZX 50 is up 26.76 points. The Taiwan Weighted index is up 5.59%. The benchmark indices of Hong Kong, Shanghai and Singaporean markets are trading higher by 1.5% to 2.5%.
Most of the major markets in both the Asia-Pacific region and Europe were closed on Friday for May Day holidays. Nonetheless, Japan's benchmark Nikkei 225 Index closed up 1.7 percent, while the U.K.'s FTSE 100 Index closed nearly flat.
On Friday, Wall Street ended with modest gains after a highly choppy ride amid low volumes. While higher natural gas and crude oil prices lifted energy stocks, banks were seen struggling on hearing that results of government's bank stress tests won't be released until May 7.
Chevron closed notably higher after the oil giant reported first-quarter earnings that fell sharply year-over-year but came in better than analysts had expected. Chevron reported first quarter earnings of $1.84 billion or $0.92 per share compared to $5.17 billion or $2.48 per share in the year-ago quarter. Analysts had been expecting the company to report earnings of $0.81 per share.
MetLife saw considerable weakness after reporting a first-quarter loss of $574 million or $0.71 per share compared with a profit of $615 million or $0.84 per share in the same quarter last year.
In an interview with RTT News, Sam Stovall, chief investment strategist at Standard & Poor's Equity Research suggested that investors turn a deaf ear to the old adage sell in May and go away this year.
Stovall pointed to the fact that since 1932, the market has gained an average of 12.2 percent in the May to October period following bear market bottoms.
In economic news, factory orders fell 0.9%, worse than the 0.6% decline that was expected, and February orders were revised lower to reflect an increase of 0.7%.
The Institute for Supply Management released its report on manufacturing activity in the month of April, showing that activity continued to contract for the month but at a much slower than expected pace.
The ISM said its index of activity in the sector rose to 40.1 in April from 36.3 in March, although a reading below 50 indicates a continued contraction in the sector. Economists had been expecting a more modest increase to a reading of 38.4.
Separately, the Reuters/University of Michigan's consumer sentiment index for the month of April was unexpectedly upwardly revised to a reading of 65.1 from the previously reported reading of 61.9. The index was unexpected to be unrevised.
With the earnings season starting to wind down, economic news is likely to be in focus in the U.S. next week. Traders are likely to pay particularly close attention to the Labor Department's monthly employment report due to be released on Friday.
Reports on construction spending, pending home sales, labor productivity, and wholesale inventories are also likely to attract some attention.
Chesapeake Energy Corp., Sprint Nextel Corp., Entergy Corp, McKesson, Estee Lauder Companies Inc., Tyson Foods Inc, Alcatel Lucent, Henry Schein, Myriad Genetics and E.W. Scripps Co. will be reporting quarterly results on Monday.
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