The South Korean stock market was up just a handful of points on Monday, but that was enough to extend the market's winning streak to three sessions, adding more than 100 points or 7.5 percent on its way to a six-month closing high. The KOSPI added to its support above 1,410 points, but investors are looking for a significant pullback as the market could challenge support at 1,400 points.
The Asian markets draw negativity from the global forecast as many of the regional markets are expected to see continued profit taking after strong rallies last week. The financials may see some selling pressure after soaring last week, while the technology issues may provide a measure of support. The European markets ended sharply lower, as did the U.S. bourses, and the Asian markets are also tipped to head into the red.
The KOSPI finished slightly higher on Monday, thanks to gains among the industrials and financials. For the day, the index added 3.03 points or 0.21 percent to close at 1,415.16 after trading between 1,405.42 and 1,420.31.
Among the gainers, Kia Motors surged 7.08 percent, while Ssangyong Motor gained 1.50 percent, Hynix Semiconductor rose 2.16 percent, LG Display LCD advanced 1.75 percent, LG Electronics added 0.49 percent, Woori Finance gained 1.75 percent, KB Financial added 0.88 percent, Hana Financial rose 4.91 percent, SK Holdings added 0.40 percent, KEPCO rose 3.78 percent, Hyundai Steel advanced 1.83 percent, Hyundai Heavy Industries added 0.81 percent, Samsung Heavy Industries gained 0.32 percent and SK Telecom advanced 1.66 percent.
Finishing lower, Hyundai Motor eased 0.92 percent, while Samsung Electronics dipped 1.05 percent, POSCO lost 0.69 percent, Daewoo Shipbuilding shed 0.20 percent and KT Corp. dipped 1.09 percent.
The lead from Wall Street is weak as stocks moved mostly lower during trading on Monday after turning in a strong performance last week. The major averages all closed firmly in negative territory, although the tech-heavy NASDAQ posted a relatively modest loss.
The weakness in the markets was largely due to profit taking, with traders cashing in on the market's recent gains amid a lack of economic data and limited corporate news. Uncertainty about the outlook for the markets inspired some of the profit taking, with some traders questioning whether stocks can extend their recent upward move amid expectations of a lack of significant catalysts in the near future.
Banking stocks helped to lead the way lower after U.S. Bancorp (USB), BB&T (BBT), and Capital One (COF) all revealed plans to sell common stock in order to raise proceeds to repay funds received under the government's financial bailout program.
Some negative sentiment was also generated by news that billionaire investor Warren Buffett's Berkshire Hathaway (BRK-A) reported a first quarter net loss of $1.53 billion compared to a year-ago profit of $940 million. Berkshire Hathaway's results were hurt by a drop in revenues as well as huge investment and derivative losses primarily on write-downs on investments in ConocoPhillips (COP).
In other news, President Barack Obama spoke earlier in the day, saying that a meeting with leading health care groups resulted in a pledge to reduce health care costs by $2 trillion over the next decade. The president said that the groups have voluntarily come together to make an unprecedented commitment to cut the rate of growth of national health care spending by 1.5 percentage points each year over the next ten years. Obama also urged Congress to work to reform health care by the end of the year, stressing that reform went beyond reducing costs.
While the major averages all finished the day in the red, the NASDAQ closed down only 7.76 points or 0.5 percent at 1,731.24. Meanwhile, the Dow fell 155.88 points or 1.8 percent to 8,418.77 and the S&P 500 closed down 19.99 points or 2.2 percent at 909.24.
In economic news, South Korea's L money supply, representing the country's the broadest measure of money supply, grew 10.6 percent year-on-year in March, slower than a 10.8 percent rise in February, the Bank of Korea said Monday. Meanwhile, the M2 measure of money supply rose 11.1 percent annually in March, compared to an 11.4 percent growth in February.
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