The stock market in South Korea opened lower and is trading in negative territory on Wednesday morning, taking cues from Wall Street where the major indices declined for the second consecutive day amid concerns about the upcoming earning season and stocks' ability to sustain the recent upward move in light of expectations of weak quarterly results.
On Tuesday, the Dow closed down 186.29 points or 2.3% at 7,790, while the Nasdaq closed down 45.10 points or 2.8% at 1,562 and the S&P 500 closed down 19.93 points or 2.4% at 816.
Alcoa, which kickstarted the earnings season in the U.S., released first quarter results after the markets closed, reporting a net loss that was worse than analysts' expectations, with the company attributing the impact of the economic downturn to its core industrial and commercial markets as well as a historic decline in aluminum prices.
In Asian trading, crude oil is currently down $0.98 at $48.17 a barrel in electronic trading. Light sweet crude for May delivery closed down $1.90 at $49.15 a barrel on the New York Mercantile Exchange on Tuesday amid demand concerns on signs of a deepening global economic downturn. Traders now look forward to the weekly inventory report from the U.S. Energy Information Administration or EIA, which will be released every Wednesday.
The benchmark KOSPI Index opened Wednesday's session at 1,285, lower than its previous close of 1,300, and is currently trading at 1,280, down 19.96 points, or 1.54%.
The local currency, the Won, opened lower against the US greenback at 1335 Won per US$, down from 1,322.50 Won, and is currently quoted at 1,346 Won per US$.
On economic front, a report released by the Ministry of Knowledge Economy and the Korea Plant Industries Association revealed that industrial plant orders plunged 61.3% year-on-year during the first quarter of 2009 to US$ 4.9 billion from US$11.2 billion reported last year, as businesses and government tightened spending amid the global economic crisis.
Financials are trading weak. KB Financial Group is losing 2.70%, Shinhan Financial is falling 2.60% and Woori Finance is moving down 2.59%.
Technology stocks are trading weak. Hynix Semiconductor is losing 1.05%, LG Electronics is falling 1.44%, and LG Display is moving down 2.05%. Market heavyweight Samsung Electronics is falling 3.25%.
Among the shipbuilders, Hyundai Heavy Industries is falling 4.45% and Daewoo Shipping is losing 2.39%. However, Samsung Heavy Industries is edging up 0.36%.
In the auto space, Hyundai Motor is down 1.44%, and Kia Motor is falling 1.87%. However, Ssangyong Motor, which, later in the day, is expected to announce large-scale job cuts as part of its restructuring program, is advancing 7.92%.
Among oil-related stocks, S-Oil is losing 1.87% while SK Holdings is trading unchanged from previous close.
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