Market Commentary and Intraday News

KOSPI May Test Support At 2,000 Points

274 days ago

(RTTNews) - The South Korea stock market bounced right back to the upside again on Tuesday, one session after it had ended the three-day winning streak in which it had collected more than 85 points or 4.5 percent. The KOSPI closed just below the 2,005-point plateau, although now traders are expecting renewed if mild selling pressure when the market opens on Wednesday.

The global forecast for the Asian markets is mixed with little movement and a slight downside bias. Profit taking from last week's rallies is expected to limit the upside, as well as uncertainty about the effectiveness of the Federal Reserve's recently announced third round of quantitative easing. The European and U.S. markets were slightly lower, and the Asian bourses figure to follow that lead.

The KOSPI finished slightly higher on Tuesday, bucking the regional trend of decline on gains from the technology stocks and industrials.

For the day, the index added 2.61 points or 0.13 percent to finish at 2,004.96 after trading between 1,995.83 and 2,005.73. There were 452 gainers and 357 decliners.

Among the actives, Korea Gas Corp (KOGAS) spiked 4.4 percent, Hanmi Pharm climbed 2.7 percent, Yuhan Corp added 1.4 percent and Hyundai Motor collected 0.2 percent, while Samsung Electronics was unchanged and Hyundai Engineering & Construction lost 1.3 percent and Daelim Industrial shed 2.5 percent.

The lead from Wall Street offers little clarity as stocks showed a lack of direction on Tuesday, after moving mostly lower in the previous session. While profit taking helped to drag stocks lower at the start of trading, selling pressure waned not long after the open as traders seemed reluctant to sell stocks and miss out on any further upside.

Uncertainty about the effectiveness of the Federal Reserve's recently announced third round of quantitative easing also helped to keep traders on the sidelines, contributing to the lackluster performance.

Traders largely shrugged off a report from the National Association of Home Builders showing that homebuilder confidence improved for the fifth straight month in September and reached a six-year high. The NAHB/Wells Fargo Housing Market Index rose to 40 in September from 37 in August. Economists had been expecting a reading of 38 as the index hit its highest level since coming in at 42 in June of 2006.

Among individual stocks, shares of FedEx (FDX) were down, with the delivery giant falling 3.1 percent after cutting its full-year earnings guidance. FedEx saw Q1 earnings that came in above its downwardly revised guidance but now expects full year earnings of $6.20 to $6.60 per share compared to its previous forecast for $6.90 to $7.40 per share.

Chip maker Advanced Micro Devices (AMD) also posted a notable loss after Thomas Seifert informed the company of his decision to resign as senior vice president and chief financial officer.

Meanwhile, shares of Dole (DOLE) moved higher after the food company said it has agreed to sell its worldwide packaged foods and Asia fresh produce businesses to Japanese trading company Itochu Corp. (ITOCY) for $1.7 billion in cash.

The major U.S. averages ended mixed and little changed on Tuesday. The Dow inched up 11.54 points or 0.1 percent to finish at 13,564.64, while the NASDAQ edged down 0.87 points or less than a tenth of a percent to end at 3,177.80 and the S&P 500 slipped 1.87 points or 0.1 percent to close at 1,459.32.

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