RTTNews - The South Korean stock market has finished higher now in two of three sessions since the end of the modest two-day losing streak that had cost it 15 points or 0.9 percent. The KOSPI closed back above support at the 1,550-point plateau, and now investors are looking for the market to build on those gains at the opening of trade on Wednesday.
The global forecast for the Asian markets is fairly optimistic as stocks around the world began to recover from steep losses in recent sessions. Technology stocks are expected to be in favor, as are the steel and financial shares. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are tipped to follow suit.
The KOSPI finished barely higher on Tuesday, recovering from heavy losses in morning trade. Gains among the technology stocks were offset by weakness among the financials and the airlines.
For the day, the index added 3.18 points or 0.01 percent to close at 1,550.24 after trading between 1,530.65 and 1,560.73.
Among the actives, Samsung Electronics was up 2.38 percent, while Hyundai Motor added 2.34 percent, Kumho Tire fell 5.07 percent, Korean Air Line shed 1.62 percent, Asiana Airlines eased 1.27 percent, KB Financial Group was down 1.36 percent, Shinhan Financial Group fell 1.02 percent and SK Telecom gathered 1.16 percent.
The lead from Wall Street is solidly positive as stocks saw notable strength on Tuesday, partly offsetting the steep losses posted in the previous session amid some encouraging earnings reports. The major averages all finished in positive territory by solid margins, but they remain well off their recent highs.
Buying interest was boosted early on by a set of positive earning reports, with Home Depot (HD), Saks (SKS) and Target (TGT) all exceeding Wall Street estimates on the bottom line, although their revenues fell short of estimates.
Optimism won out despite the release of a report from the Commerce Department showing an unexpected decrease in housing starts in the month of July. The report said that housing starts fell 1.0 percent to an annual rate of 581,000 in July from the revised June estimate of 587,000. Economists had expected starts to rise to 598,000 from the 582,000 originally reported for the previous month.
Separately, the Labor Department revealed that producer prices dropped 0.9 percent in July following a 1.8 percent increase in the previous month. Economists had expected the measure to slip 0.3 percent for the month. Core prices, which exclude the volatile food and energy sectors, ticked down 0.1 percent in July. Economists were looking for core prices to edge up by 0.1 percent.
While the major averages pulled back off their highs for the session going into the close, they remained firmly in positive territory. The Dow closed up by 82.07 points or 0.9 percent at 9,217.41, the Nasdaq advanced by 25.08 points or 1.3 percent to 1,955.92 and the S&P 500 rose by 9.94 points or 1 percent to 989.67.
In economic news, South Korea's department store sales climbed 4 percent year-on-year in July after a 3.6 percent increase in June, the Ministry of Knowledge Economy said on Tuesday. This is the fifth consecutive month of growth in sales. At the same time, sales from major discount stores dropped 6 percent on a yearly basis in July, sharper than a 1.4 percent fall in June.
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