RTTNews - The South Korean stock market has finished lower now in three of five sessions since the end of the three-day winning streak that saw it put on nearly 70 points or 4 percent. The KOSPI fell back below the 1,600-point plateau, and now investors are bracing for continued losses when the market opens for business on Tuesday.
The global forecast for the Asian markets remains solidly pessimistic after most of the markets saw heavy losses in Monday's trade. Resource stocks are expected to remain under pressure following a fall in commodity prices, while airlines, properties and financials also could see significant losses. The European and U.S. markets finished broadly negative, and the Asian markets are also tipped to move to the downside.
The KOSPI finished sharply lower on Monday, thanks to heavy losses among the financials and brokerages - although gains among the automobile producers and technology stocks limited the decline.
For the day, the index declined 16.09 points or 1.0 percent to close at 1,591.85 after trading between 1,580.28 and 1,611.65.
Among the decliners, KB Financial Group shed 3.2 percent, while Mirae Asset Securities was down 3.2 percent and Hyundai Mobis plunged 9.9 percent.
Finishing higher, Hyundai Steel gained 4.3 percent, while Samsung Electronics added 0.9 percent, Hynix Semiconductor collected 2.8 percent, Hyundai Motor was up 1.9 percent and Kia Motors climbed 4.3 percent.
The lead from Wall Street is firmly negative as stocks remained mostly negative throughout the trading day on Monday after moving sharply lower in early trading. While the major averages did not see much follow-through on their initial downward move, they remained stuck in the red.
The weakness in the markets came as a sell-off in the Chinese stock market inspired some traders to cash in on recent strength. Nonetheless, selling pressure remained relatively subdued ahead of the release of some key economic data later this week.
Traders largely shrugged off the results of the Institute for Supply Management - Chicago's survey of regional manufacturing activity, which showed that activity unexpectedly reached neutral territory in August following ten consecutive months of contraction. The index of manufacturing activity rose to 50.0 in August from 43.4 in July, with a reading of 50 acting as the breakeven point versus contraction and expansion. Economists had been expecting a more modest increase to a reading of 48.0.
In corporate news, Walt Disney (DIS) announced that it has agreed to acquire Marvel Entertainment (MVL) in a stock and cash transaction. Marvel shareholders will receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
The major averages moved well off their lows going into the close, although they still ended the day firmly in negative territory. The Dow closed down by 47.92 points or 0.5 percent at 9,496.28, the NASDAQ fell by 19.71 points or 1 percent to 2,009.06 and the S&P 500 slipped by 8.31 points or 0.8 percent to close at 1,020.62.
In economic news, South Korea is on Tuesday scheduled to release final July numbers for imports, exports and trade balance, as well as August figures for consumer prices. Analysts are expecting exports to fall 20.1 percent on year, while imports are called lower by 32.1 percent on year. The trade balance is expected to show a surplus of $2.4 billion, while inflation is expected to climb 2.1 percent on year.
Also, South Korea's industrial production rose in July, but at a slower pace compared to the previous month, the country's National Statistical Office announced on Monday. On a yearly basis, industrial production rebounded from a decline in the previous month.
Industrial production rose by 2 percent from the previous month in July, compared to the 5.7 percent increase in June. Year-on-year, production was up 0.7 percent in July compared to the 1.2 percent decline in the last month, and the 9 percent fall in May. Economists expected the yearly production to drop 1.1 percent.
Shipments were up 0.9 percent from the previous month, but edged down 1.4 percent on year. The decline was mainly a result of falling domestic shipments, down 1.9 percent on a yearly basis in July compared to the 0.4 percent drop in June. Export shipments were down 0.7 percent. The inventory index rose 1.1 percent month-on-month in July, but fell 15 percent from the same period of the previous year.
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