The South Korean stock market has finished higher now in back-to-back sessions since it ended the three-day winning streak in which it gathered 100 points or 7 percent on its way to a six-month closing high. The KOSPI added to its support at 1,400 points, and analysts are calling for a higher open once again in Monday's trade.
The global forecast for the Asian markets is optimistic, thanks to better than expected economic data out of the United States and some positive corporate news. The European markets finished broadly higher, as did the U.S. bourses - and the Asian markets are tipped to go the same way, although some of the gains may be limited as the day progresses thanks to profit taking amidst lengthy winning streaks.
The KOSPI finished modestly higher on Friday, as strength among the financial stocks was enough to nudge the market into positive territory following mixed performances in the technology and industrial sectors.
For the day, the index was up 11 points or 0.79 percent to close at 1,412.13 after trading between 1,390.83 and 1,412.14. Volume was 705.8 million shares worth 7.29 trillion won, with gainers outnumbering decliners 468 to 338.
Among the gainers, Samsung Electronics was up 0.53 percent, steel maker POSCO rose 0.81 percent, oil stock SK rose 1.23 percent, S-Oil gained 0.64 percent, telecom stock KT moved up 1.66 percent, Asiana Air Line added 0.67 percent, Koran Air Line added 1.66 percent, LG Display LCD moved up 1.29 percent, banker Woori Finance gained 2.70 percent, Korea Exchange Bank surged 6.39 percent, Kia Motors rose 1.80 percent and Daewoo Shipbuilding gained 3.64 percent.
Bucking the trend, Hynix Semiconductor was off 1.07 percent, while LG Electronics ended down 0.49 percent, Hyundai Motor declined 1.65 percent, Ssangyong Motor closed down 0.99 percent, Hyundai Heavy slipped 0.4 percent, Samsung Heavy Industries fell 1.44 percent, SK Telecom closed down 0.82 percent and KB Financial fell 1.62 percent.
The lead from Wall Street is firm as stocks showed a strong upward move over the course of the trading day on Friday, with the major averages ending notably higher after seeing some early volatility. The markets benefited from better than expected jobs data and a positive reaction to the results of the financial stress tests.
Before the start of trading, the Labor Department released a report showing that 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.
Regulators determined that Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) are among the companies that need to improve their capital position, while Goldman Sachs (GS) and JP Morgan (JPM) are among those that don't need additional funding.
In other news, Dow component McDonald's (MCD) closed up 2.9 percent after the fast food giant said its global comparable sales rose 6.9 percent in April. The company also said systemwide sales fell 1.0 percent due largely to the stronger dollar.
The major averages closed firmly in positive territory, although off their best levels of the day. 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. With the gains, the major averages all closed higher for the week, with the Dow and the S&P 500 setting four-month closing highs. While the Dow and the S&P 500 posted weekly gains of 4.4 percent and 5.9 percent, respectively, the NASDAQ rose a more modest 1.2 percent.
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