RTTNews - The South Korean stock market has finished higher now in seven straight sessions, gathering more than 120 points or 8.5 percent en route to a fresh 10-month closing high. The KOSPI is closing on resistance at 1,500 points, but now analysts are predicting a mild withdrawal at the opening of trade on Thursday.
The global forecast for the Asian markets is a study in contrasts as expected strength in the technology sectors is likely to be offset by falling oil stocks reacting to a decline in the price of oil. The day's corporate earnings results are also unlikely to spark momentum. The European and U.S. markets finished in mixed fashion but did not stray too far from the unchanged line in either direction - and the Asian markets are expected to show little movement with perhaps a slight downside bias.
The KOSPI finished slightly higher on Wednesday, although the movement was limited as the current rally may be starting to run out of steam. Steel makers and other industrials led the gainers, offsetting profit taking among the technology and financial stocks.
For the day, the index was up 5.05 points or 0.34 percent to close at 1,494.04 points after trading between 1,485.04 and 1,496.49. Volume was 498.9 million shares worth 6 trillion won, with winners outnumbering losers 450 to 336.
Among the gainers, KT&G rose 1.36 percent, while GS Engineering & Construction Corp rallied 3.36 percent, POSCO added 2.6 percent, Dongkuk Steel Mill was up 2 percent, Hyundai Heavy Industries rose 3.7 percent and Korea Exchange Bank gained 1 percent. Bucking the trend, LG Electronics fell 1.13 percent.
Wall Street offers an inconsistent lead as stocks finished on a mixed note after choppy trade throughout Wednesday's session, reacting to the latest earnings results with low volume. The major averages closed on opposite sides of the unchanged mark, largely unable to extend their recent run-up.
Earlier this morning, traders delved into quarterly results from a number of big-name companies including Apple (AAPL), Yahoo! (YHOO), Pfizer (PFE) Boeing (BA), Morgan Stanley (MS), Wells Fargo (WFC), and PepsiCo (PEP). The reports saw mixed reaction, however, as most firms met or beat estimates by cost cutting rather than through revenue growth.
In other news, Federal Reserve Chairman Ben Bernanke redelivered his address regarding monetary policy before the Senate Banking Committee while also fielding questions regarding the current and near-term economic outlook. In his prepared remarks, Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
Questioning the Fed chief, Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, noted that while some signs of economic recovery have been seen on Wall Street, the benefits have yet to make it to Main Street.
Bernanke conceded that unemployment is the most pressing issue facing the Fed, but he noted that there are steps that Congress could take to ease the situation, similar to the already-passed extension of unemployment benefits. He said one serious concern was that the long-term unemployed might see their job skills atrophy, leaving them unqualified for work once the economy recovers. Extending job training programs might be one response Congress should consider, the Fed chief said.
The major averages moved sideways in late session dealing to cap off a lackluster trading day. While the NASDAQ eked out a gain of 10.18 points or 0.5 percent, finishing at 1,926.38, the Dow fell by 34.68 points or 0.4 percent to 8,881.26. Further, the S&P 500 slipped by 0.51 points or 0.1 percent to close at 954.07.
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