RTTNews - The South Korean stock market on Wednesday saw an end to the winning streak that had reached four sessions and added more than 40 points or 2.5 percent on its way to a fresh 11-month closing high. The KOSPI slid below the 1,560-point plateau, and now analysts are suggesting that the market could see additional losses at the opening of trade on Thursday.
The global forecast could signal selling pressure for the Asian markets, thanks largely to continued profit taking for several of the key bourses following sharp advances last week. Oil, health insurance and telecommunication shares are expected to see additional pressure, with some support coming from bargain hunting among the financials and the properties. The European markets finished firmly in negative territory, while the U.S. bourses ended slightly in the red - and the Asian markets also are tipped to head to the downside.
The KOSPI finished modestly lower on Wednesday, as gains among the financial stocks were wiped out by selling pressure among the technology shares and automobile producers.
For the day, the index was off 6.90 points or 0.4 percent to finish at 1,559.47 after trading between 1,557.79 and 1,575.03. Volume was 487.5 million shares worth 5.97 trillion won. There were 468 decliners and 335 gainers, with 83 stocks finishing unchanged.
Among the decliners, Ssangyong Motor fell by the daily limit of 15 percent, while Hynix Semiconductor fell 0.8 percent, LG Electronics lost 2.3 percent, Hyundai Motor dropped 1.1 percent, Hyundai Mobis fell 4.4 percent and Korea Exchange Bank fell 0.9 percent.
Finishing higher, Shinhan Financial Group gained 0.6 percent, while KB Financial Group advanced 2.3 percent, Samsung Fire & Marine Insurance gained 2.7 percent and Hyundai Marine & Fire Insurance rose 2.6 percent.
The lead from Wall Street is mildly negative as stocks finished Wednesday's session moderately lower after disappointing data on the health of the service sector and the labor market generated some selling pressure. The major averages all closed in negative territory, offsetting some of their recent gains.
Prompting some negative sentiment in the markets was a report from the Institute for Supply Management on activity in the service sector in the month of July, which showed that the pace of contraction in the sector unexpectedly accelerated from the previous month. The ISM said its index of activity in the sector edged down to 46.4 in July from 47.0 in June, with a reading below 50 indicating a contraction in the sector. The decrease came as a surprise to economists, who had expected the index to rise to 48.0.
A separate report released by payroll processor Automatic Data Processing (ADP) showed that private sector employment saw another notable decline in the month of July, although the pace of job losses slowed to its slowest rate since October of 2008. ADP said non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.
Meanwhile, the U.S. Commerce Department revealed that factory orders rose 0.4 percent in June, surprising economists, who had expected orders to drop 0.8 percent.
On the earnings front, traders reacted to a mixed bag of earnings, with Procter & Gamble (PG), Kraft Foods (KFT), Ralph Lauren (RL) and Electronic Arts (ERTS) largely beating bottom line estimates while falling short on the revenue front.
The major averages saw a late session recovery attempt fizzle, leading to a negative finish. The Dow closed down by 39.22 points or 0.4 percent at 9,280.97, the NASDAQ slipped by 18.26 points or 0.9 percent to 1,993.05 and the S&P 500 fell by 2.93 points or 0.3 percent to 1,002.72.
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