RTTNews - The South Korean stock market added less than 2 points on Tuesday, but that was enough to extend its winning streak to 11 sessions, surging more than 145 points or 10 percent en route to a fresh 11-month closing high. The KOSPI is holding above the 1,525-point plateau, but analysts predict that the rally could finally run out of steam at the opening of trade on Wednesday.
The global forecast for the Asian markets is finally downbeat and could signal the end of several lengthy winning streaks in the region. Weakness among the commodity stocks is expected to weight heavily, while steel producers and technology shares could also ease on profit taking. The European markets ended firmly in the red and the U.S. markets also were mostly lower, and the Asian markets also are expected to move to the downside.
The KOSPI finished barely higher on Tuesday, boosted by gains among the financials and construction shares - although profit taking in the technology and automobile sectors eliminated much of the overall upside.
For the day, the index was up 1.98 points or 0.1 percent to close at 1526.03 after trading between 1,518.50 and 1,528.55.
Among the gainers, Hyundai Engineering & Construction gained 4.3 percent, while GS Engineering & Construction added 2.2 percent, Samsung Engineering was up 2.5 percent, Korean Air surged 6.6 percent, SK Telecom gained 1.7 percent, Shinhan Financial Group added 2.9 percent and KB Financial Group was up 3.4 percent. Finishing lower, Hyundai Motor shed 1.2 percent and Hynix Semiconductor eased 1.4 percent.
The lead from Wall Street is mildly negative as stocks closed Tuesday's session on a mixed note in reaction to the day's varied earnings and economic reports following a choppy trading session. The major averages closed on opposite sides of the unchanged mark, with the tech-heavy NASDAQ posting a modest gain.
On the economic front, consumer confidence deteriorated by more than expected in the month of July, according to a report released by the Conference Board this morning. The decrease reflected less favorable assessments of both current conditions and the near-term outlook. The Conference Board said that its consumer confidence index fell to 46.6 in July from an unrevised 49.3 in June. Economists had been expecting a much more modest decline by the index to a reading of about 49.0.
Also, the Standard and Poor's /Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 17.1 percent in May compared to the 18.1 percent decrease reported for April. Economists had expected the report to show that prices fell 17.9 percent year-over-year. On a monthly basis, S&P said that 13 of the 20 metro areas reported positive returns, contributing to the first monthly increase by the 20-city composite since the summer of 2006. The 20-city composite index rose 0.5 percent for the month.
In earnings news, Valero Energy (VLO), Amgen (AMGN) and Manitowoc (MTW) reported earnings that beat analyst estimates. On the other hand, Office Depot (ODP) fell well short of analyst forecasts. Meanwhile, IBM Corp. (IBM) announced that it has entered into a definitive agreement to acquire SPSS Inc. (SPSS). The all-cash transaction has a price of $50 per share, resulting in a total cash consideration of approximately $1.2 billion.
The major averages saw further choppy movement to close out another low volume session. While the NASDAQ closed up by 7.62 points or 0.4 percent at 1,975.51, the Dow fell by 11.79 points or 0.1 percent to 9,096.72 and the S&P 500 slipped by 2.56 points or 0.3 percent to 979.62.
In economic news, all seven members of Bank of Korea's Monetary Policy Committee voted to hold its key interest rate at 2 percent on June 11, the minutes of the meeting showed on Tuesday. The central bank maintained the Base Rate at a record low for a fourth consecutive month in June.
One board member said the central bank should study about the exit strategy and appropriate timing to end its accommodative policy. Central bank's attention was sought also on asset prices. The central bank forecast the economy to contract 1.6 percent in 2009 compared with its earlier estimate of 2.4 percent decline.
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