The Korean stock market is exhibiting a mixed trend on Monday with participants not evincing any keen interest in picking up stocks despite strong cues from Wall Street. In fact, markets across the Asia-Pacific region have been struggling this morning despite opening on a fairly positive note.
The Korean benchmark index KOSPI, which edged up to 1,420 in early trading, drifted down to 1,416 subsequently. The index is currently up 3.83 points or 0.27% at 1,413.21.
Among automobile stocks, Kia Motor is trading 2.2% up while Ssangyong Motor and Hyundai Motor are trading lower by 3.2% and 1.6% respectively.
Bank stocks are trading weak. Korea Exchange Bank and KB Financial are trading lower by 0.6% and 0.4%, respectively. Woori Finance is down 1.7%, while Shinhan Financial is trading lower by 1.2%.
Tech stock Hynix Semiconductor is trading firm with a 3.6% gain. LG Display LCD is up 2%. LG Electronics is down 0.5%. Heavyweight Samsung Electronics is trading lower by 1.6%.
Airlines stocks are trading weak with Korean Airline and Asiana Airline losing 2% and 1.1% respectively. Among shipbuilders, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding are down by 1.2% - 1.5%. Bulk Carrier STX Pan Ocean is down by over 1%.
Among steel stocks, Hyundai Steel is up 0.4%. POSCO is down 1.6% from its previous close. Telecom stocks are trading mixed. Oil issues SK Holdings and S-Oil are down with modest losses while Energy stock KEPCO is trading with a 4.7% gain.
Among other markets in the Asia-Pacific region, Australia, New Zealand, Japan and Singapore are currently trading weak. Markets in Hong Kong, Shanghai and Taiwan are trading in positive territory.
On Friday, stock markets across the Asia-Pacific region had closed mostly higher, reacting positively to the U.S. stress test results. Japan's benchmark Nikkei 225 Index closed up 0.5 percent, at a six-month closing high.
European stocks also turned in strong performances, although they ended the session off their best levels of the day. The U.K.'s FTSE 100 Index rose 1.4 percent, while the French CAC 40 Index and the German DAX Index closed up 1.9 percent and 2.3 percent, respectively.
Better than expected jobs data and a positive reaction to the results of the financial stress tests lifted stock prices on Wall Street Friday. Despite some profit taking at higher levels, the major averages ended the session on a high note. The Dow closed up 164.80 points or 2 percent at 8,574.65, the Nasdaq closed up 22.76 points or 1.3 percent at 1,739.00 and the S&P 500 closed up 21.84 points or 2.4 percent at 929.23.
According to a report from the Labor Department, employment fell by 539,000 jobs in April following a revised decrease of 699,000 jobs in March. The decrease in employment marked the smallest drop in jobs since October of 2008.
While the decrease was smaller than the loss of 600,000 jobs expected by economists, upward revisions to the number of job losses in February and March partly offset some of the optimism about the labor market.
The Labor Department also said that the unemployment rate rose to 8.9 percent in April from 8.5 percent in March. With the increase, which came in line with economist estimates, the unemployment rate rose to a new 25-year high.
Traders also reacted positively to the official results of the government's stress tests of the nation's 19 largest financial firms, which were released after the close of trading on Thursday.
U.S. bank regulators said about half of the country's biggest financial institutions need to improve their capital positions in order to ensure that they can weather a further downturn in the economy. The results of the stress tests showed that 10 of the 19 banks tested need to raise a total of $74.6 billion. The banks involved in the exercise account for two-thirds of the assets and more than half of the loans in the U.S. banking system.
U.S. economic data is likely to attract some attention next week, with reports on retail sales, producer and consumer price inflation, and industrial production likely to be in focus. Traders are also likely to keep a close eye on the weekly jobless claims report.
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