The losing streak has reached three sessions for the South Korean stock market, which has shed nearly 70 points or 5.5 percent on its way to a three-week closing low. The KOSPI is clinging to support at 1,300 points, but investors say the market could slip beneath that line at the opening of trade on Wednesday.
The global forecast for the Asian markets is fairly pessimistic as concerns over the spread of swine flu continue to weigh on investors. Some slightly better than expected economic data provides a bit of optimism, as does some mixed corporate news. The European markets ended sharply lower and the U.S. markets ended barely below the unchanged line, and the Asian markets are tipped to follow the latter lead.
The KOSPI finished sharply lower on Tuesday, as the airlines, industrials, financials and technology stocks all finished lower.
For the day, the index dropped 39.59 points or 2.95 percent to close at 1,300.24 after trading between 1,298.86 and 1,353.80. Volume was 746.19 million shares worth 7.52 trillion won, with decliners outnumbering gainers by 737 to 142.
Among the decliners, Hyundai Heavy Industries tumbled 5.02 percent, while Samsung Heavy Industries fell 4.48 percent, Daewoo Shipbuilding lost 6.93 percent, Asiana Air Line fell 3.25 percent, Korean Air Line was down 2.38 percent, Hynix Semiconductor plunged 8.79 percent, Samsung Electronics fell 1.71 percent, LG Display LCD tumbled 4.32 percent, LG Electronics ended down 1.96 percent, Woori Finance plummeted 5.89 percent, Korea Exchange Bank slumped 4.57 percent, KB Financial fell 4.32 percent, Hyundai Motor fell 2.59 percent, Ssangyong Motor plunged 7.23 percent, POSCO fell 4.04 percent, SK Oil tumbled 4.64 percent and S-Oil was down 0.86 percent.
Bucking the trend, KT Telecom was up 0.28 percent and KEPCO rose 0.97 percent.
The lead from Wall Street is virtually flat with a touch of downside as stocks showed a lack of direction throughout the trading day on Tuesday after failing to sustain an initial downward move. The major averages bounced back and forth across the unchanged line before eventually ending the session modestly lower. The choppy trading came as traders digested mixed economic and corporate news combined with continued concerns that the swine flu outbreak may become a pandemic.
In economic news, the Conference Board released a report earlier in the day showing that its consumer confidence index increased by much more than expected in April, reflecting a significant improvement in consumers' assessment of the short-term outlook. The report showed that the consumer confidence index jumped to 39.2 in April from an upwardly revised 26.9 in March. Economists had expected the index to increase to 29.7 from the 26.0 originally reported for the previous month.
Separately, a report from Standard and Poor's showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 18.6 percent in February, a modest deceleration from the 19.0 percent drop in prices that was reported for January.
In other news, the Wall Street Journal reported that regulators are pushing Bank of America (BAC) and Citigroup (C) to raise more capital following early results of the government's stress test analysis, generating some concerns about the results of the tests. The Journal said that the capital shortfall amounts to billions of dollars at Bank of America. The report specified that executives at both banks are objecting to the preliminary findings from the government's examination.
Meanwhile, an increase in the number of confirmed cases of swine flu has led the World Health Organization to raise the level of its influenza pandemic alert to Phase 4. At the same time, the WHO does not recommend that countries close borders or restrict travel.
The major averages moved to the downside in the latter part of the trading day, ending the session just below the unchanged line. The Dow closed down 8.05 points or 0.1 percent at 8,016.95, the NASDAQ closed down 5.60 points or 0.3 percent at 1,673.81 and the S&P 500 closed down 2.35 points or 0.3 percent at 855.16.
In economic news, South Korean consumer confidence jumped in April as concerns over the economic downturn eased among households on positive current balance and increased assets value such as stock prices.
Consumer confidence that measures sentiment in six categories stood at 98 in April, up from 84 last month, the Bank of Korea reported Tuesday. The April reading was the highest since the central bank started to compile monthly series in July 2008. However, a reading below 100 indicates that pessimists outnumber optimists.
For comments and feedback: contact email@example.com