Market Commentary and Intraday News

South Korea Shares May Extend Losing Streak

254 days ago

(RTTNews) - The South Korea stock market headed south again on Monday, one session after it had halted the two-day slide in which it had fallen just 4 points or 0.2 percent. The KOSPI finished just above the 1,980-point plateau, and now analysts are predicting continued softness at the opening of trade on Tuesday.

The global forecast for the Asian markets is negative after the World Bank cut its growth outlook for the East Asia region, to 7.2 percent this year from 8.3 percent in 2011. The forecast is weaker than the bank's May projection of 7.6 percent growth. In addition, Greece-troika talks continue to drag and Spain remains reluctant to request a bailout, even as European leaders continued to stress on the 'urgency' to contain the crisis. The European and U.S. markets were mostly lower, and the Asian markets are expected to open in similar fashion.

The KOSPI finished modestly lower on Monday following losses from the automobile producers and steel companies.

For the day, the index lost 13.28 points or 0.67 percent to finish at 1,981.89 after trading between 1,979.24 and 1,994.05. Volume was 499.4 million shares worth 4.49 trillion won. There were 533 decliners and 300 gainers.

Among the actives, Hyundai Motor shed 1.86 percent, Kia Motors fell 1.26 percent, POSCO plunged 2.19 percent and LG Display dropped 2.05 percent, while Samsung Electronics added 0.58 percent and SK Hynix jumped 1.94 percent.

The lead from Wall Street suggests consolidation as stocks moved mostly lower during trading on Monday as traders expressed renewed concerns about the outlook for the global economy. The losses on the day partly offset the strength that was seen in the markets last week.

The weakness on Wall Street was partly due to negative sentiment generated by news that the World Bank cut its growth outlook for the East Asia region as growth in developing economies in East Asia is expected to slow to 7.2 percent this year from 8.3 percent in 2011. The forecast is weaker than the bank's May projection of 7.6 percent growth.

East Asian growth is seen recovering to 7.6 percent in 2013, backed by continued strong domestic demand and an uptick in global trade growth. However, the estimate is lower than an earlier prediction of 8 percent growth.

Traders also kept an eye on developments in Europe, where European finance ministers are holding a meeting to discuss the region's debt crisis. Nonetheless, trading activity remained relatively subdued, with many traders away from their desks due to the Columbus Day holiday.

The major U.S. averages were down on Monday as the Dow edged down 26.50 points or 0.2 percent to finish at 13,583.65, while the NASDAQ fell 23.84 points or 0.8 percent to end at 3,112.35 and the S&P 500 slid 5.05 points or 0.4 percent to close at 1,455.88.

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