RTTNews - The South Korean stock market on Tuesday extended its losing streak to four sessions, shedding more than 60 points or 4.5 percent in the process. The KOSPI crashed through support at 1,400 points, although now analysts predict that the market could recoup some of those losses at the opening of trade on Wednesday.
The global forecast for the Asian markets is cautiously optimistic, although the positive sentiment could be damaged by the test-firing of another missile on Wednesday morning by North Korea. The markets get a boost from better than expected economic data out of the United States, and retailers also are forecast to trade higher. The European markets finished mostly higher and the U.S. markets ended sharply higher - and the Asian bourses are also tipped to trade in the green.
The KOSPI finished sharply lower on Tuesday as investors worried about North Korea's nuclear and missile tests. The technology stocks finished under pressure, while the financials also ended in the red.
For the day, the index dropped 28.85 points or 2.06 percent to finish at 1,372.04 after trading between 1,361.58 and 1,409.29.
Among the decliners, Samsung Electronics was down 1.2 percent, while Hyundai Heavy Industries lost 4.22 percent, KB Financial Group lost 4.22 percent, Hana Financial Group fell 5.73 percent, Hynix Semiconductor fell 5.14 percent and POSCO finished 1.77 percent lower. Bucking the trend, Ssangyong Corp jumped 15 percent.
The lead from Wall Street is broadly positive as stocks staged a substantial rally over the course of the trading day on Tuesday after seeing some initial weakness, snapping a four-day losing streak. The major averages finished near their best levels of the day, bolstered by some positive news on the health of the U.S. consumer.
The Conference Board's reading on consumer confidence for May improved by far more than expected, reaching its highest level since September. The data generated some optimism about the outlook for consumer spending, which accounts for nearly two-thirds of economic activity. The consumer confidence figure helped to bolster some of the day's risk appetite, as reflected by the surge in equities following the release of the report.
Earlier in the day, disappointing housing price data contributed to the initial weakness. Traders largely shrugged off the data, however, citing the lagging nature of the numbers and choosing to focus on the encouraging consumer confidence data.
Retail stocks enjoyed a considerable run-up on the day, benefiting from the better than expected consumer confidence data. The S&P Retail Index closed up 4 percent, although it remains well off the seven-month highs that it set earlier this month.
The major averages moved roughly sideways in the second half of the day, holding onto strong gains. The Dow closed up 196.17 points or 2.4 percent at 8,473.49, the Nasdaq rose 58.42 points or 3.5 percent to 1,750.43 and the S&P 500 closed up 23.33 points or 2.6 percent at 910.33.
In economic news, South Korea's consumer confidence improved in May, with the index moving up to 105 from 98 in April, the Bank of Korea said Tuesday. This was the highest reading in almost two years, the bank said.
A reading above 100 indicates that optimists outnumber pessimists. Most of the sub indicators showed an improvement in the May. Meanwhile, consumers' inflation expectations for the next year stood at 4 percent in May, unchanged from April.
The consumer confidence survey was conducted by the Bank of Korea among 2,200 households in 56 cities between May 12 and May 19.
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