RTTNews - The South Korean stock market finished higher by less than two points, but that was enough to extend its winning streak to four sessions - gathering more than 40 points or 2.5 percent on its way to a fresh 11-month closing high. The KOSPI is holding above the 1,565-point plateau, and now analysts are predicting that the market will hover in that vicinity when it opens on Wednesday.
The global forecast for the Asian bourses offers little guidance with a flat opening likely in the cards. Financials and properties are expected to extend gains, but they'll likely be countered by profit taking among the oil, steel and retail stocks. The European markets finished modestly in negative territory, while the U.S. markets ended slightly positive - and the Asian markets are also expected to hover around the unchanged line.
The KOSPI finished barely higher on Tuesday, as profit taking in the afternoon erased solid gains from the morning session. The financials were hit especially hard, cutting into gains from the technology stocks and automobile producers.
For the day, the index was up 1.39 points or 0.01 percent to close at 1,566.37 after trading between 1,558.47 and 1,586.12.
Among the gainers, Samsung Electronics rose 1.4 percent, while Hynix Semiconductor added 0.9 percent, Hyundai Motor gained 3.4 percent and Kia Motors added 1.9 percent.
Finishing lower, KB Financial Group fell 1.7 percent, while Woori Finance Holdings retreated 5.3 percent, Samsung Securities dropped 1.9 percent and Samsung SDI ended down 0.9 percent.
Wall Street offers a barely positive lead as stocks ended Tuesday's trading on a positive note amid some late session buying interest following a choppy session. The major averages all finished in positive territory by moderate margins, building on yesterday's strong gains that helped the NASDAQ and S&P 500 cross key levels.
On the economic front, the National Association of Realtors released a report showing that pending home sales growth in June exceeded economist estimates by a wide margin. With the increase, pending sales rose for the fifth consecutive month. NAR said its pending home sales index jumped 3.6 percent to 94.6 in June from an upwardly revised reading of 91.3 in May. Economists had been expecting a much more modest increase by the index of about 0.7 percent.
Earlier, the Commerce Department released a report showing that personal spending increased by slightly more than expected, while personal income fell by more than expected. The report showed that personal spending rose 0.4 percent in June following a revised 0.1 percent increase in May. Economists had been expecting spending to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.
At the same time, the Commerce Department said that personal income fell by 1.3 percent in June after increasing by a revised 1.3 percent in the previous month. The decrease compares to economist estimates of a 1.0 percent decline. Subsequently, the report said that personal saving as a percentage of disposable personal income was 4.6 percent in June compared with 6.2 percent in May.
On the earnings front, Centex (CTX) was one of the few bright spots among a slew of disappointing results that included Pulte (PHM), D.R. Horton (DHI), Archer Daniels Midland (ADM) and Tenet Healthcare (THC), among others.
The major averages showed a notable upward move going into the close, climbing back above the unchanged line. The Dow closed up by 33.63 points or 0.4 percent at 9,320.19, the NASDAQ advanced by 2.70 points or 0.1 percent to 2,011.31 and the S&P 500 rose by 3.02 points or 0.3 percent to 1,005.65.
In economic news, South Korea's foreign exchange reserves rose for the fifth consecutive month in July, the Bank of Korea said Tuesday. The foreign exchange reserves amounted to US$237.51 billion at the end of July, up US$5.78 billion from the previous month. The reserves increased mainly due to a US$440 million repayment by the state-run pension agency to the Bank of Korea. This was part of a currency swap arrangement by the pension agency with the central bank, the report said.
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