RTTNews - The South Korean stock market has alternated positive and negative finishes through the last six sessions, since the end of the three-day winning streak that saw it put on nearly 70 points or 4 percent. The KOSPI moved back above the 1,620-point plateau, but now the market is forecast to plummet at the opening of trade on Wednesday.
The global forecast suggests that the Asian markets will open under some pressure, with weakness expected particularly from the financial, property and airline sectors. Commodities also may wilt, thanks to a sharp decline in the price of crude oil. The European and U.S .markets all finished sharply lower, and the Asian bourses also are tipped to move firmly to the downside.
The KOSPI finished sharply higher on Tuesday, shrugging off weakness in the morning session. Technology stocks fueled the recovery, as did the automobile producers and the financials.
For the day, the index jumped 31.21 points or 2.0 percent to finish at 1,623.06 after trading between 1,583.11 and 1,624.34.
Among the gainers, Samsung Electronics added 3.6 percent, while Samsung Electro-Mechanics surged 9.7 percent, LG Electronics was up 3.9 percent, Hyundai Motor climbed 7.6 percent, Kia Motors jumped 4.7 percent, KB Financial Group added 2.9 percent and Woori Finance Holdings was up 3.2 percent.
The lead from Wall Street is broadly negative as stocks saw substantial weakness on Tuesday, when traders saw the day's positive economic news as already priced into the market. The major averages all moved sharply lower, adding to the losses posted in the previous session.
This morning, the Institute for Supply Management released a report showing that its manufacturing index jumped to 52.9 in August from 48.9 in July, with a reading above 50 indicating an expansion in the sector. With the increase, the index rose to its highest level since June of 2007. On average, economists had been expecting a more modest increase by the index to a reading of 50.2, which would have still indicated modest growth in the sector.
Separately, pending home sales increased by much more than expected in the month of July, according to a report released by the National Association of Realtors. The report showed that the pending home sales index rose 3.2 percent to 97.6 in July from a reading of 94.6 in June. The increase, which exceeded economist estimates of 1.5 percent growth, lifted the index to its highest level since June of 2007.
Meanwhile, the Commerce Department released a report showing that construction spending fell 0.2 percent in July following a downwardly revised 0.1 percent increase in June. Economists had expected spending to fall 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
In corporate news, online auction giant eBay (EBAY) announced that it has signed an agreement to sell its Skype communications unit for about $1.9 billion in cash and a $125 million note.
The major averages ended the session firmly in negative territory, just off their worst levels of the day. The Dow fell by 185.68 points or 2 percent to 9,310.60, the NASDAQ declined by 40.17 points or 2 percent to 1,968.89 and the S&P 500 fell by 22.58 points or 2.2 percent to close at 998.04.
In economic news, South Korea's consumer price index increased both on a monthly basis and on a yearly basis in August, Statistics Korea said on Tuesday.
Year-on-year, consumer prices were up 2.2 percent in August, faster than the 1.6 percent growth in the prior month. Analysts were looking for a yearly growth of 2.1 percent. Excluding agricultural products and oils from the goods basket, prices rose 3.1 percent from August 2008.
On a monthly basis, prices were up 0.4 percent, which was the same rate of growth seen in July. Excluding agricultural products and oils, the monthly rate of growth slowed to 0.1 percent in August.
Also, South Korea saw a trade surplus of $1.67 billion in August, the Ministry of Knowledge Economy said on Tuesday, coming in below expectations for a $2.4 billion surplus following marks of $4.41 billion in July and $7.27 billion in June.
Exports were down 20.6 percent on year to $29.08 billion, missing estimates for a 20.1 percent annual decline. Imports were down 32.2 percent to $27.41 billion - in line with forecasts for a 32.1 percent annual contraction.
Through the first eight months of the year, South Korea has a trade surplus of $26.83 billion, the data showed, with exports totaling $226.57 billion and imports topping $199.73 billion.
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