RTTNews - The South Korean stock market on Tuesday saw an end to the three-day winning streak that saw it put on nearly 70 points or 4 percent en route to a 13-month closing high. The KOSPI maintained support above the 1,600-point plateau, and now analysts are expecting the market to add to those gains at the opening of trade on Wednesday.
The Asian markets are dealt a cautiously optimistic lead from the global forecast after most stocks in the region finished lower in the previous session. Airlines and housing stocks are expected to support the markets, while the financials, properties and gold miners also are predicted to rebound - but oil stocks may fall under pressure on the declining price of crude oil. The European and U.S. markets finished with mild gains and the Asian bourse are also tipped to move modestly to the upside.
The KOSPI finished modestly lower on Tuesday, as the automobile producers and technology stocks weighed on investors.
For the day, the index shed 10.84 points or 0.7 percent to close at 1,601.38 after trading between 1,596.00 and 1,610.33. Volume was 453.2 million shares worth 7.47 trillion won, with decliners outpacing gainers 471 to 337.
Among the decliners, KB Financial Group lost 2.9 percent, while Woori Finance Holdings eased 0.3 percent, Samsung Electronics declined 1 percent and Hyundai Motor shed 0.9 percent.
Bucking the trend, LG Display added 2.6 percent, while Hyundai Engineering & Construction gained 4 percent, GS Engineering & Construction was up 3.5 percent and SK Energy climbed 3.6 percent.
The lead from Wall Street is mildly positive as stocks finished modestly higher on Tuesday, as the day's positive economic reports and news of Ben Bernanke's reappointment generated some upbeat sentiment on Wall Street. The major averages all finished in positive territory by slim margins, well off their best levels of the day.
Buying interest was largely sparked by the day's economic data, with a report from the Conference Board showing that consumer confidence rebounded significantly in the month of August after seeing some deterioration in July. The consumer confidence index jumped to 54.1 in August from an upwardly revised 47.4 in July. Economists had been expecting the index to increase to 47.9 from the 46.6 originally reported for the previous month.
Separately, Standard and Poor's revealed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 15.4 percent in June compared to a revised 17 percent drop in May. Economists had expected prices to fall 16.4 percent compared to the same month a year ago.
In other news, President Barack Obama officially nominated Ben Bernanke for a second term as Federal Reserve Chairman this morning, with the president praising the manner in which the Fed Chief handled the recent financial crisis.
Meanwhile, both the White House and the Congressional Budget Office released new projections of near-record budget deficits totaling roughly $1.58 trillion for 2009. That level of deficit, a combination of increased government spending and plummeting tax revenues due to the recession, will ring in at 11.2 percent of the country's gross domestic product, the highest deficit since World War II, according to both analyses.
The major averages saw choppy movement in late session trading, holding onto modest gains. The Dow closed up 30.01 points or 0.3 percent at 9,539.29, the NASDAQ closed up 6.25 points or 0.3 percent at 2,024.23 and the S&P 500 closed up 2.43 points or 0.2 percent at 1,028.00.
In economic news, South Korea's household credit increased in the second quarter after declining in the prior quarter, the Bank of Korea reported on Tuesday. At the end of June, household debt increased 14.1 trillion won to 697.7 trillion won. At the same time, annual growth in household debt eased to 5.7 percent from 6.7 percent in the first quarter.
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