RTTNews - The South Korean stock market continued to alternate positive and negative finishes through the last seven sessions, since the end of the three-day winning streak that saw it put on nearly 70 points or 4 percent. The KOSPI slid back below the 1,620-point plateau, and now analysts are predicting that the market could extend its decline at the opening of trade on Thursday.
The global forecast provides little in the way of guidance for the Asian markets, although a touch of downside could drag the markets lower. Housing stocks and financials are expected to extend losses from the previous session, although gold miners are predicted to surge. The European and U.S. markets finished slightly lower, and the Asian markets are also expected to track to the downside.
The KOSPI finished modestly lower on Wednesday, as weakness among the financial stocks was offset somewhat by a rally among the automobile producers and some gains from the technology stocks.
For the day, the index was off 9.9 points or 0.61 percent to close at 1,613.16 after trading between 1,592.48 and 1,622.82.
Among the decliners, Samsung Electronics shed 1.9 percent and Samsung Securities dropped 2.5 percent.
Finishing higher, Ssangyong Motor surged by the daily limit of 15 percent, while Hyundai Mobis rose 3.6 percent, Hyundai Motor rose 0.9 percent, Kia Motors gained 2 percent and LG Display jumped 5.9 percent.
Wall Street puts forth a mildly pessimistic lead as stocks lingered near the unchanged mark for much of the trading day before a tame late session sell-off resulted in a modestly lower close on Wednesday. The major averages all closed on the downside, as traders largely shrugged off today's economic data and looked towards key employment data to close out the week.
The Federal Reserve released the minutes of its August meeting, indicating that the members of the Federal Open Market Committee are more confident that the economic downturn is ending and that growth is likely to resume in the second half of the year. The committee members said that their projections for the second half of 2009 and for subsequent years had not changed appreciably since the June meeting, except that they now saw smaller downside risks.
Nonetheless, while the members saw signs of stabilization in consumer spending and housing, most agreed that the economy is likely to recover only slowly during the second half of this year and all saw it as still vulnerable to adverse shocks.
In other economic news today, the Commerce Department issued a report showing that factory orders increased by less than economists had been expecting in July.
Meanwhile, Automatic Data Processing, Inc. (ADP) said that non-farm private employment fell by more than economists had been anticipating in August, although the loss of jobs still marked the smallest drop in employment since September of 2008.
Separately, the Labor Department released its revised report on labor productivity in the second quarter, showing that productivity increased by more than previously estimated amid a smaller than expected drop in output.
The major averages saw some downside in late session trading, resulting in a lower close. The Dow closed down 29.93 points or 0.3 percent at 9,280.67, the NASDAQ fell by 1.82 points or 0.1 percent to 1,967.07 and the S&P 500 declined by 3.29 points or 0.3 points to close at 994.75.
In economic news, Fitch Ratings on Tuesday affirmed South Korea's long-term foreign currency Issuer Default Rating at 'A+' and upgraded its outlook to stable from negative, due to an improvement in the sovereign credit fundamentals compared to the 'A' peer group. At the same time, the firm affirmed the long-term local currency IDR at 'AA', short-term IDR at 'F1' and the Country Ceiling at 'AA', also with the outlook revised to stable from negative.
South Korea's sovereign credit fundamentals have regained ground against the 'A' peer group, warranting an outlook revision to Stable, Ai Ling Ngiam, Director, Asia Sovereigns said.
On the corporate front, South Korean auto-parts maker Hyundai Motor Co.'s subsidiary Hyundai Mobis Co. won a $2 billion order from US automaker Chrysler Group LCC, the largest-ever contract for the Seoul-based company, media reported on Wednesday. Hyundai Mobis said in a statement that it will provide front and rear chassis modules for Chrysler's Jeep Grand Cherokee and Dodge Durango models from May 2010.
As per reports, Hyundai Mobis would build a new production line near a Chrysler plant in Michigan to supply the parts. The company aims to begin test production from February 2010. Hyundai Mobis has been providing chassis modules for Chrysler's Jeep Wrangler since 2006 from its factory in Ohio.
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