The winning streak has reached three sessions now for the South Korean stock market, which has collected almost 30 points or 1.7 percent on its way to a fresh six-month closing high. The KOSPI broke through resistance at 1,350 points, but investors are leery of any further gains in Thursday's trade.
The global forecast for the Asian markets is mixed with a touch of downside, thanks to a series of disappointing quarterly reports. Financials are expected to remain under pressure, although some of the bigger exporters and technology stocks may provide support. The European stock markets finished sharply higher and the U.S. markets ended mostly lower - and the Asian markets are predicted to see equal dichotomy.
The KOSPI finished sharply higher on Wednesday, supported by the technology stocks, financials and automobile producers.
For the day, the index jumped 19.21 points or 1.4 percent to close at 1,356.02 after trading between 1,336.41 and 1,360.41. Volume was at 717.59 million shares worth 8.43 trillion won, with gainers outnumbering decliners 613 to 257.
Among the gainers, Hynix Semiconductor surged 14.83 percent, while LG Electronics added 3.77 percent, Hyundai Motor gained 2.33 percent, Kia Motors rallied 5.84 percent, Woori Finance rose 0.32 percent, KB Financial gained 1.21 percent, Samsung Electronics advanced 3.05 percent, LG Display rallied 4.36 percent, Asiana Air Line was up 3.02 percent and Korean Air Line ended up 2.86 percent.
Finishing lower, Daewoo Shipbuilding lost 2.07 percent, while Samsung Heavy Industries declined 1.73 percent, Hyundai Heavy slipped 0.24 percent, Korea Exchange Bank was down 0.68 percent, POSCO slipped 0.37 percent, SK Oil declined 1.65 percent and KT Telecom was down 2.66 percent.
The lead from Wall Street is modest pessimism as stocks experienced considerable volatility over the course of the trading day on Wednesday, with the major averages unable to sustain any significant moves. The choppy trading came as investors continued to digest mixed earnings news.
Early on in the session, traders reacted negatively to quarterly results from Morgan Stanley (MS), which became one of the few major financial companies to report weaker than expected first quarter results. Morgan Stanley reported a much wider than expected first quarter loss of $0.57 per share and revealed that it has slashed its quarterly dividend by 80 percent to $0.05 a share.
Separately, Boeing (BA) reported first quarter net income of $610 million, down 50 percent from last year quarter's $1.21 billion. Revenues for the quarter rose 3 percent to $16.5 billion from last year's $15.99 billion. Looking forward, the aerospace giant reaffirmed its full year revenue guidance but lowered its earnings guidance due to lower earnings at its commercial airplanes business.
Meanwhile, fast food giant McDonald's (MCD) reported first quarter net income of $0.87 per share, compared to $0.81 per share in the same quarter of last year, while analysts expected the company to report earnings of $0.82 per share.
In other news, Treasury Secretary Timothy Geithner spoke to the Economics Club of Washington earlier in the day, hinting that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on. He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth.
The major averages pulled back sharply going into the close, with the Dow and the S&P 500 falling firmly into negative territory. While the NASDAQ managed to hold onto a modest gain, closing up 2.27 points or 0.1 percent at 1,646.12, the Dow closed down 82.99 points or 1.0 percent at 7,886.57 and the S&P 500 closed down 6.53 points or 0.8 percent at 843.55.
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