RTTNews - One day after snapping the three-day winning streak that saw it put on nearly 70 points or 4 percent, the South Korean stock market turned right back to the upside on Wednesday to hit a fresh 13-month closing high. The KOSPI moved above the 1,610-point plateau, although investors are bracing for a modest decline at the opening of trade on Thursday.
The global forecast for the Asian markets is mixed with a touch of downside, but they are not expected to show much movement. Housing, technology and airline stocks could see solid gains, but they're likely to be countered by selling among the railroad stocks and the commodities. European markets ended firmly in negative territory, while the U.S. markets ended barely above the unchanged line - and the Asian markets are projected to trade slightly to the downside.
The KOSPI finished modestly higher on Wednesday, thanks to modest gains among the technology and shipping sectors.
For the day, the index added 12.74 points or 0.8 percent to close at 1,614.12 after trading between 1,602.40 and 1,615.05.
Among the gainers, POSCO added 2.3 percent, while Daewoo Shipbuilding & Marine Engineering climbed 4.5 percent, Hanjin Shipping was up 2.6 percent, LG Display surged 3.6 percent, Daewoo International added 1.6 percent and Korea Gas Corp gained 1.3 percent.
Wall Street offers not much in the way of guidance as stocks finished Wednesday's session little changed, with the day's trading marred by choppy movement despite largely positive news on the economic front. The major averages closed only slightly higher after turning in another lackluster trading session. Some traders remained on the sidelines ahead of the Thursday's weekly jobless claims report, which is expected to show a modest decrease in first-time claims for unemployment benefits.
Some of the day's early upside came on the heels of data on new home sales, which increased by much more than expected in the month of July, according to a report released by the Commerce Department. The report showed that new home sales surged up by 9.6 percent to an annual rate of 433,000 in July from the revised June rate of 395,000. Economists had been expecting sales to edge up to 390,000 from the 384,000 originally reported for the previous month.
Some positive sentiment was also generated by a report from the Commerce Department showing a much bigger than expected increase in durable goods orders in the month of July, with the growth largely due to a substantial rebound in orders for transportation equipment. The report showed that new orders for durable goods jumped 4.9 percent in July following a revised 1.3 percent decrease in June. Economists had expected orders to increase by 3.2 percent compared to the 2.2 percent decrease that had been reported for the previous month.
Excluding an 18.4 percent increase in orders for transportation equipment, durable goods orders increased by a much more modest 0.8 percent in July compared to a 2.5 percent increase in June. The increase came in below economist estimates of 1.0 percent growth.
In other news, Atlanta Federal Reserve Bank President Dennis Lockhart said earlier today that although he believes the worst of the economic downturn has passed, the economic recovery will be slow and will contribute to a protracted period of high unemployment.
The major averages showed a slight upward move going into the close, ending the day just above the unchanged line. The Dow closed up by 4.23 points at 9,543.52, the NASDAQ gained 0.20 points to finish at 2024.43 and the S&P 500 rose by 0.12 to 1,028.12.
In economic news, South Korea's Finance Minister Yoon Jeung-hyun said on Wednesday that it is premature to talk about ending expansionary policy as uncertainties continue.
In a meeting with business executives, Yoon said, Currently, there is a need to prepare for the shift by focusing on how to exit, but it is premature to talk about when to shift such policies into a tightening stance, the Yonhap News Agency quoted.
Moreover, the minister said South Korea will likely achieve its economic growth target this year. The government predicted in June that Asia's fourth-largest economy may contract 1.5 percent this year on massive stimulus measures, slower than the 2 percent shrinkage forecast previously.
Also, South Korea's consumer confidence rose to a seven-year high in August triggered by rising hopes of an economic recovery. The consumer confidence index climbed to 114 in August from 109 in July, the Bank of Korea said Wednesday. The sentiment indicator rose for the fifth straight month and the reading was the highest since the third quarter of 2002.
The central bank measured consumer sentiment on a quarterly basis until the second quarter of 2008. A reading above 100 indicates that optimists outnumber pessimists. The confidence indicator stood above 100 for the fourth month in August.
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