RTTNews - The South Korean stock market has finished higher now in two of four trading days since the end of the four-day winning streak in which it had gathered more than 40 points or 3 percent. The KOSPI is knocking on the door to resistance at 1,400 points, although analysts predict instead that the market may see a mild withdrawal at the opening of trade on Monday.
The global forecast for the Asian markets offers little guidance, although the markets may slip under mild selling pressure on some overdue profit taking. Some better than expected economic news out of the United States is likely to keep the decline in the modest range. The European markets finished Friday's session in the green, while the U.S. markets ended little changed with a slight negative bias - and the Asian markets are projected to also move a bit lower.
The KOSPI finished sharply higher on Friday, fueled by bargain hunting among the financial and technology sectors. For the day, the index jumped 16.57 points or 1.2 percent to close at the daily high if 1,394.71 after dipping as low as 1,373.24. Volume was 495.1 million shares worth 5.82 trillion won.
Among the gainers, Shinhan Financial Group rose 1.2 percent, while Samsung Electronics climbed 2.5 percent, KB Financial Group added 2.4 percent, Korea Electric Power Corp gained 5.4 percent and Korea Gas Corp jumped 7.1 percent.
The lead from Wall Street is flat with a touch of downside as stocks finished Friday's trading mostly lower after a lackluster performance following strong gains in the previous session. The major averages ended the day on opposite sides of the unchanged line, as traders were cautious following an employment report indicative of some signs of life in the labor market.
The report from Labor Department showed that non-farm payroll employment fell by 345,000 jobs in May following a revised decrease of 504,000 jobs in April. Economists had expected a decrease of about 520,000 jobs compared to the loss of 539,000 jobs originally reported for the previous month. At the same time, the report said that the unemployment rate jumped to 9.4 percent in May from 8.9 percent in April. With the increase, the unemployment rate came in above economist estimates of 9.2 percent and rose to its highest level since August of 1983.
On the corporate front, shares of Anglo-Australian mining giant Rio Tinto (RTP) rose after the company entered into a joint venture agreement with rival BHP Billiton and scrapped its $19.5 billion deal with Chinalco. In lieu of its deal with Chinalco, Rio Tinto instead launched a heavily discounted $15.2 billion rights issue. The company also reported a decline in fiscal 2009 first-quarter earnings, adversely impacted by price movements and production volumes amid the downturn in economy.
Meanwhile, international retailer Guess (GES) said its first quarter profit fell 32 percent from last year, as revenue dropped and margins shrank. However, the company's quarterly earnings per share beat analysts' expectations. The firm's shares closed up by 5.8 percent for the day.
The major averages eventually finished the day mixed after being marred by choppy trading throughout the session. While the Dow finished up by 12.89 points of 0.2 percent at 8,763.13, the NASDAQ slipped by 0.60 points or less than a tenth of a percent to 1,849.42 and the S&P 500 edged down by 2.37 points or 0.3 percent to 940.09. For the week, the major averages all enjoyed notable gains despite being slowed by lackluster sessions on Wednesday and Friday. The Dow moved up by 3.1 percent for the week, while the NASDAQ rose by 4.2 percent and the S&P 500 climbed by 2.3 percent.
In economic news, the South Korean central bank confirmed on Friday that the country's gross domestic product unexpectedly rose 0.1 percent in the first quarter of 2009 compared to the previous quarter. The preliminary estimate in April came up with the same figure, and allowed South Korea to avert a technical recession after the 5.6 percent quarterly fall in the previous three months.
On an annual basis, GDP was revised slightly higher from -4.3 percent to -4.2 percent. Analysts had been expecting a 4.6 percent decline after the 3.4 percent contraction in the fourth quarter of 2008.
Among the production components, agricultural was down 0.1 percent on quarter, while manufacturing fell 3.4 percent, utilities rose 8.0 percent, construction added 5.9 percent and services were up 0.3 percent.
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