RTTNews - The South Korean stock market has finished higher now in back-to-back sessions, collecting more than 15 points or 1 percent to reach its highest closing score in a year. The KOSPI moved above the 1,575-point plateau, and now investors are looking for additional gains at the opening of trade on Monday.
The global forecast for the Asian markets is optimistic, fueled by better than expected economic data out of the United States. Properties and retail stocks are tipped to move higher, although some of the gains may be capped by profit taking among the commodities following last week's run-up. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are also projected to move higher.
The KOSPI finished modestly higher on Friday, carried by strength among the financial and technology sectors.
For the day, the index added 10.96 points or 0.7 percent to close at 1576.00 after trading between 1,559.18 and 1,576.80.
Among the gainers, Ssangyong Motor rose by the daily 15 percent limit, while KB Financial Group was up 2.4 percent, Woori Finance Holdings gained 4.6 percent, Hana Financial Group climbed 3 percent, Samsung Electronics was up 0.1 percent, Hynix Semiconductor surged 3.7 percent, LG Electronics added 0.8 percent and KT Corp was up 0.1 percent.
Wall Street offers a broadly positive lead as stocks saw a notable rally on Friday, fueled by the day's encouraging economic data. The major averages all finished in positive territory by notable margins, offsetting some of the losses posted earlier in the week.
Buying interest in stocks was sparked by a Labor Department report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.
Additionally, the Labor Department said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.
On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.
Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.
The major averages ceded some ground in late session trading but still finished with strong gains. The Dow closed up by 113.81 points or 1.2 percent at 9,370.07, the NASDAQ climbed by 27.09 points or 1.4 percent to 2,000.25, and the S&P 500 rose by 13.40 points or 1.3 percent to 1,010.48. With the gains, the major averages all closed higher for the week, marking the fourth consecutive week of gains. The Dow and the S&P 500 posted weekly gains of 2.2 percent and 2.3 percent, respectively, while the NASDAQ rose by a more modest 1.1 percent for the week.
In economic news, South Korea will on Monday announce June money supply data and July producer price index numbers. Money supply is expected to climb 11.9 percent on year following the 9.5 percent annual expansion in the previous month. PPI fell 3.1 percent in June.
Also, India and South Korea inked a free trade agreement, the Comprehensive Economic Partnership Agreement (CEPA) on Friday in Seoul, which will remove or reduce tariffs over the next 10 years, as also open trade and investment between the two countries, say media reports.
Indian Commerce and Industry Minister Anand Sharma and South Korean counterpart Kim Jong-hoon signed the agreement rounding off three years of negotiations. Talks were started in March 2006 and concluded in September 2008. The Indian cabinet approved the pact last month while Seoul officials expect it to get ratified by next January.
The agreement covers goods and services as well as investments, besides containing chapters on competition. The two countries agreed to let skilled professionals, including computer programmers and engineers, work temporarily in each other's country, the first such commitment offered by Seoul under its free-trade deals. In the service sector, India is to open its telecom, accounting, medical and advertising markets to South Korean companies. Also, South Korean banks will be allowed to open branches in India.
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