South Korea Stock Market May Extend Gains

(RTTNews.com) - The South Korea stock market has finished higher now in three straight sessions, rising nearly 65 points or 3.2 percent in the process. The KOSPI finished just above the 1,950-point plateau, and now investors are cautiously optimistic for further upside when the market opens on Thursday.

The global forecast for the Asian markets is mixed to higher, thanks to optimism regarding the latest monetary policy statement from the Federal Reserve. The upside may be capped, however, by hurt by lingering debt concerns from Greece. Gold shares are expected to provide support, along with steel, oil and property stocks.

The KOSPI finished barely higher on Wednesday following a four-day break for the Lunar New Year, nudged into the green by gains from the technology stocks and the automobile producers.

For the day, the index collected 2.34 points or 0.12 percent to finish at 1,952.23 after trading between 1,945.14 and 1,973.35. Volume was 372 million shares worth 6.07 trillion won. There were 421 gainers and 401 decliners.

Among the gainers, Samsung Electronics added 0.81 percent, while LG Electronics jumped 4.05 percent, Hyundai Motor gathered 0.86 percent, Kia Motors climbed 1.78 percent and SK Telecom surged 4.03 percent.

The lead from Wall Street is firmly positive as stocks showed a strong upward move on Wednesday, benefitting from the latest monetary policy statement from the Federal Reserve which said economic conditions are likely to warrant exceptionally low interest rates at least through late 2014.

The Fed has kept its target for the federal funds rate at zero to 0.25 percent since December of 2008. The central bank previously indicated that it planned to keep rates at near-zero levels through at least mid-2013. The Fed noted that its pledge to keep rates at exceptionally low levels reflects expectations for low rates of resource utilization and subdued inflation over the medium run.

At the same time, the central bank said that data received since its last meeting in December suggests that the economy has been expanding moderately, despite some slowing in global growth. With regard to the economic outlook, the Fed said it expects GDP to grow by 2.2 percent to 2.7 percent in 2012, reflecting a downward revision from the 2.5 to 2.9 percent growth forecast in November.

By contrast, sentiment may be capped by lingering concerns that Greece may default on its sovereign debt. Greece said it aims to complete a debt swap deal with its private creditors by week's end, but markets remained skeptical.

Also, the National Association of Realtors reported that pending home sales fell 3.5 percent to a reading of 96.6 in December from a reading of 100.1 in November. Economists had been expecting the index to drop by about 1.0 percent.

The major averages closed firmly in positive territory, near their best levels of the day. The Dow rose 83.10 points or 0.7 percent to 12,758.85, the NASDAQ jumped 31.67 points or 1.1 percent to 2,818.31 and the S&P 500 climbed 11.41 points or 0.9 percent to 1,326.06. With the gains on the day, the Dow reached an eight-month closing high, while the NASDAQ and the S&P 500 ended the session at nearly six-month closing highs.

In economic news, South Korea's gross domestic product expanded 0.4 percent in the fourth quarter of 2011 compared to the previous three months, the Bank of Korea said on Thursday. That missed forecasts for an increase of 0.5 percent following the 0.8 percent gain in the third quarter. On a yearly basis, GDP climbed 3.4 percent - again, just shy of estimates for a 3.5 percent increase, which would have been unchanged from the previous quarter.

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