Market Commentary and Intraday News
South Korea Shares May Test Support At 1,900 Points
288 days ago
(RTTNews) - The South Korea stock market on Monday halted the two-day losing streak in which it had fallen almost two dozen points or 1.2 percent. The KOSPI settled just above the 1,910-point plateau, and now analysts are forecasting renewed if mild selling pressure at the opening of trade on Tuesday.
The global forecast for the Asian markets is mixed with a hint of weakness after ratings agency Moody's downgraded the outlook for the European Union to negative from stable. A decline in Germany's manufacturing activity also may weigh on investors. The European markets were higher on Monday, while the U.S. bourses were closed for the Labor Day holiday - and the Asian markets are expected to open lower.
The KOSPI finished modestly higher on Monday following gains from the automobile producers and the chemical companies.
For the day, the index added 7.59 points or 0.40 percent to finish at 1,912.71 after trading between 1,885.03 and 1,921.84. Volume was 587.7 million shares worth 4.18 trillion won.
Among the gainers, Hyundai Motor added 0.4 percent, while Kia Motors climbed 2.0 percent, SK Innovation spiked 2.8 percent, LG Chem jumped 1.3 percent, Hyundai Mobis collected 1.9 percent and SK Hynix gathered 0.9 percent.
Moving lower, Samsung Electronics shed 1.2 percent, while Samsung Life lost 0.7 percent and POSCO fell 0.8 percent.
There is no lead from Wall Street, which was closed for the Labor Day holiday, while the news from Europe is mixed - with caution also growing ahead of Friday's all-important nonfarm payroll data from the United States.
Adding to the pessimistic outlook, ratings agency Moody's on Monday downgraded the European Union's outlook to negative from stable, citing a weakened outlook for the region's largest economies and deterioration in credit-worthiness of certain members. The EU's AAA rating was unaffected.
On the economic front, Germany's manufacturing activity declined more than initially estimated for August, final data from Markit Economics showed on Monday. The final Markit/BME Purchasing Managers' Index came in at 44.7 in August, down from the flash reading of 45.1, but rose from 43 in July.
In a separate report, the Eurozone's manufacturing sector continued to contract in August, but a slower pace than in July, survey results confirmed. However, the improvement was slightly weaker than estimated in the flash report. In the U.K., the Markit/Chartered Institute of Purchasing & Supply Purchasing Managers Index rose more than expected to 49.5 from 45.2 in July. Economists had forecast the index to rise to 46.3.
The major European markets were firmly higher on Monday as the DAX in Germany picked up 0.63 percent, while the CAC 40 in France surged 1.19 percent, London's FTSE collected 0.82 percent and the Swiss market added 0.78 percent.
In economic news, inflation in South Korea eased to its weakest level in 12 years in August, boosting expectations that the central bank may ease policy further to support economic growth. The consumer price index rose 1.2 percent year-on-year in August, easing from 1.5 percent in July. Economists had expected 1.4 percent. This was the weakest inflation rate since May 2000. Core consumer prices, which exclude oil and agricultural products, advanced 1.3 percent year-on-year, slightly faster than 1.2 percent rise in the preceding month.
On the corporate front, South Korean automaker Hyundai Motor posted 4.6 percent lower total sales of 293,924 units in August 2012, compared to 308,122 units a year ago, the company said on Monday. Domestic sales for the month declined to 35,950 units from last year's 51,264 units. Overseas sales totaled 257,974 units in August, up 0.4 percent from 256,858 units in August 2011.
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