RTTNews - The South Korean stock market on Wednesday wrote a finish to the three-day winning streak in which it had collected more than 22 points or 1.7 percent to hit a fresh high for the year. The KOSPI is holding support at the 1,430-point plateau, and analysts are expecting the market to hover right around that level at the opening of trade on Thursday.
The global forecast for the Asian markets offers little guidance as investors wait for the corporate earning season to get more deeply under way after a modest start. Continued pressure on commodities also negates any bullish sentiment. The European markets finished sharply lower and the U.S. bourses ended fairly flat on either side of the unchanged line - and the Asian markets are tipped to follow the U.S .lead.
The KOSPI finished slightly lower on Wednesday, as weakness among the shippers, energy stocks and steel producers was offset by bargain hunting in the automobile producers and technology shares. For the day, the index eased 3.18 points or 0.2 percent to close at the daily high of 1,431.02 after dipping as low as 1,412.68.
Among the decliners, POSCO was off 1.2 percent, while SK Energy lost 2.6 percent, STX Pan Ocean shed 4.5 percent and Daewoo Shipbuilding & Marine Engineering fell 3 percent. Finishing higher, Samsung Electronics was 0.8 percent higher, while LG Electronics added 1.5 percent, Hyundai Motor rose 2.8 percent and Kia Motors gained 4 percent.
The lead from Wall Street is inconclusive as stocks swung between gains and losses over the course of the trading session on Wednesday, ending the day little changed after a modest upward move at the open. The major averages finished mixed after posting steep losses in the previous session. The lack of direction that was seen over the course of the trading day came as traders were reluctant to make any significant moves ahead of the start of the earnings season.
Shortly after the closing bell, Alcoa (AA) reported an adjusted second quarter loss of $256 million or $0.26 per share, while Wall Street expected the company to report a loss of $0.37 per share. The firm also said its quarterly revenues were $4.2 billion, edging out analyst estimates of $3.93 billion.
The release of quarterly results from Alcoa is seen as the unofficial start of the earnings season, as the aluminum producer is typically the first Dow component to reports its results. During the day, traders also digested earnings from Ruby Tuesday (RT), Pepsi Bottling Group (PBG) and Family Dollar (FDO) on the day.
Some of the day's selling pressure was mitigated by the results of the Treasury Department's $19.0 billion offering of ten-year notes. The sale drew a high-yield of 3.365 percent while attracting very strong demand, with the bid-to-cover ratio coming in at 3.28, the highest on record. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages closed on opposite sides of the unchanged mark by slim margins, with the S&P 500 closing modestly lower despite a late-session rally. The Dow closed up by 14.81 points or 0.2 percent at 8,178.41 and the NASDAQ rose by 1 point or 0.1 percent to 1,747.17, while the S&P 500 fell 1.47 points or 0.2 percent to 879.56.
In economic news, the South Korean central bank is on Thursday scheduled to announce its monthly decision on interest rates. Analysts are expecting the bank to keep rates on hold at a record low of 2 percent. The rate has been unchanged since a 50 basis-point cut on March 12, which marked the sixth reduction in four months.
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