RTTNews - The South Korean stock market has finished higher now in back-to-back sessions, collecting more than 40 points or 3 percent along the way. The KOSPI has regained the 1,400-point closing plateau, and now analysts are predicting further upside for the market when it opens for business on Thursday.
The global forecast for the Asian markets is broadly optimistic, thanks to solid earnings reports, encouraging remarks from the FOMC and some decent economic data out of the world's largest economy. A rebound among the commodities and crude oil prices adds to the positive sentiment. The European and U.S. markets finished sharply higher, and the Asian bourses are also predicted to show solid gains.
The KOSPI finished sharply higher on Wednesday, spurred by positive earnings news from Goldman Sachs and Intel. Financials led the gainers, while the technology shares also ended with significant gains.
For the day, the index surged 35.30 points or 2.5 percent to close at 1420.86 after trading between 1,402.28 and 1,422.41.
Among the gainers, KB Financial Group jumped 7 percent, while Shinhan Financial Group gained 5 percent, Woori Finance Holdings added 4.2 percent, Samsung Electronics climbed 5.1 percent and Hynix Semiconductor gathered 5.1 percent.
Wall Street offers a sharply positive lead as stocks continued to move higher throughout much of Wednesday's trading session after a strong start, fueled by trader reaction to the day's earnings data. The major averages all posted substantial gains on the day, extending their gains for the third straight session.
Early strength came amid reaction to a slew of earnings reports, spearheaded by Intel (INTC), which beat analysts' second quarter earnings estimates. While Yum! Brands (YUM) also beat expectations, Abbott Labs (ABT) and Altera (ALTR) reported earnings that came in line with estimates.
Stocks were further bolstered in the afternoon following the Federal Reserve's announcement that it expects a less severe economic contraction in 2009 and a moderately stronger recovery in 2010. The minutes of the June meeting of the Federal Open Market Committee showed that the GDP estimates were revised to show a smaller than expected decrease in 2009 and a bigger than expected increase in 2010. At the same time, the Fed said it expects the unemployment rate to come in higher than previously estimated based on the incoming employment data.
The day's influx of economic figures was kicked off this morning by a Labor Department report showing that consumer prices saw a 0.7 percent increase in June compared to the previous month. Economists had projected an advance of about 0.6 percent. Compared to the same period last year, consumer prices were down 1.4 percent, the largest year-over-year decline since 1950. Core prices, which exclude the volatile food and energy sectors, advanced 0.2 percent compared to the previous month. Economists had expected an increase of 0.1 percent.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating. With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The major averages saw further upside in late day trading, finishing near their best levels of the day. The Dow closed up by 256.72 points or 3.1 percent at 8,616.21, the NASDAQ climbed 63.17 points or 3.5 percent to 1,862.90, and the S&P 500 rose 26.84 points or 3 percent to 932.68.
In economic news, South Korea's jobless rate edged up to 4 percent on a seasonally adjusted basis in June from 3.9 percent in May, the National Statistical Office said on Wednesday. The number of unemployed persons increased to 980,000 from 954,000 in the preceding month.
At the same time, the number of employed persons grew to 23.5 million from 23.3 million in May. The economically active population rose to 24.5 million from 24.3 million, while the participation rate edged up to 61.3 percent from 60.7 percent in the preceding month.
On an unadjusted basis, the jobless rate increased to 3.9 percent in June from 3.8 percent in the preceding two months.
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