The South Korea stock market has finished higher now in two straight sessions, collecting almost 65 points or 4 percent along the way. The KOSPI settled just below the 1,850-point plateau, and now investors may be tempted to lock in gains when the market opens on Friday.
The global forecast for the Asian markets is cautious following an unexpected interest rate cut from China, which raised some questions about the strength of the world's second largest economy. And in the U.S., the Labor Department reported a drop in initial jobless claims - but comments from Federal Reserve Chairman Ben Bernanke were disappointing as he made no explicit reference to further easing measures. The European markets were higher and the U.S. bourses were mixed, and the Asian markets are expected to follow the latter example.
The KOSPI finished sharply higher on Thursday, catching up on some positive sentiment following Wednesday's holiday for Memorial Day. Gains were broadly based, although the financials, technology stocks and industrials outperformed.
For the day, the index surged 46.10 points or 2.56 percent to finish at 1,847.95 after trading between 1,839.49 and 1,853.20.
Among the gainers, Samsung Electronics spiked 5.2 percent, while LG Display surged 6.4 percent, Hyundai Heavy Industries climbed 3.8 percent and Daewoo Shipbuilding and Marine Engineering jumped 2.7 percent.
The lead from Wall Street suggests mild consolidation as stocks turned in a lackluster performance on Thursday after failing to sustain an early upward move. Notable selling pressure emerged in the final hour of trading, however, resulting in a mixed close for the markets.
The initial support was partly due to a positive reaction to a surprise interest rate cut by China's central bank. The move backed up recent optimism about further stimulus from the world's central banks, although it also raised some questions about the strength of the Chinese economy.
The markets also benefited from a report from the Labor Department showing a drop in initial jobless claims in the week ended June 2. But stocks pulled back well off their highs as Federal Reserve Chairman Ben Bernanke began to testify before the Joint Economic Committee in Washington.
Bernanke said that U.S. economic growth appears poised to continue at a moderate pace and suggested that last week's disappointing jobs report may have reflected temporary factors. While Bernanke said that Fed "remains prepared to take action" if the economic situation worsens, he made no explicit reference to further easing measures.
Meanwhile, traders largely shrugged off news that Fitch cut Spain's credit rating by three notches to BBB with a negative outlook.
The major averages ended the day on opposite sides of the unchanged line as the Dow climbed 46.17 points or 0.4 percent to finish at 12,460.96, while the NASDAQ fell 13.70 points or 0.5 percent to end at 2,831.02 and the S&P 500 edged down 0.14 points or less than a tenth of a percent to 1,314.99.
In economic news, South Korea's central bank will on Friday conclude its monetary policy meeting and then announce its decision on interest rates. Analysts are expecting the bank to trim the benchmark by 25 basis points, from 3.25 percent to 3 percent.
by RTT Staff Writer
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