The South Korea stock market has moved lower now in three straight sessions, falling more than 30 points or 1.3 percent in the process. The KOSPI finished just above the 1,970-point plateau, and now traders are bracing for further damage when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains bleak, thanks largely to concerns from Europe. Of concern, the Spanish economy slipped back into recession in the first quarter of 2012, fueling concerns that the country may fail to meet the deficit targets. On the political front, investors worried that the turmoil in the Netherlands may cause the country to lose its AAA rating. The European and U.S. markets finished firmly in the red, and the Asian bourses are tipped to follow suit.
The KOSPI finished barely lower on Monday as losses from the industrials and automobile producers were offset by support from the steel and technology stocks.
For the day, the index eased 2.02 points or 0.10 percent to finish at 1,972.63 after trading between 1,964.12 and 1,980.94. Volume was 578 million shares worth 3.52 trillion won. There were 510 decliners and 314 gainers.
Among the decliners, Samsung Electronics shed 0.23 percent, while Hyundai Motor lost 1.57 percent, Kia Motors fell 1.63 percent, LG Chem dropped 0.79 percent, Hyundai Heavy Industries eased 0.16 percent and Hyundai Engineering and Construction plunged 2.29 percent.
Moving higher, POSCO jumped 1.59 percent, while Hyundai Steel climbed 2.00 percent and Hyundai Mobis added 0.54 percent.
The lead from Wall Street suggests further consolidation as stocks saw considerable weakness on Monday, although they ended the session well off their worst levels of the day. Troubling news from overseas weighed on the markets in early trading, but selling pressure waned as they day progressed.
Bank of Spain said that gross domestic product shrank 0.4 percent on quarter. This followed a 0.3 percent fall in the fourth quarter, which was the first decline in activity since the final three months of 2009.
Traders also reacted negatively to news that French President Nicolas Sarkozy came in second in a first round of voting, losing to socialist Francois Hollande. Sarkozy is expected to face an uphill battle in a run-off election against Hollande on May 6, raising concerns about a setback to efforts to diffuse the European debt crisis.
Among individual stocks, shares of Kellogg (K) came under pressure after the cereal market lowered its full-year 2012 financial guidance based on a weaker-than-expected first quarter performance. Kellogg fell by 6.1 percent to a two-month closing low.
Retail giant Wal-Mart (WMT) also posted a notable loss on the day, sliding by 4.7 percent after the New York Times reported on bribery allegations at the company's Mexico unit. Wal-Mart confirmed that it is probing possible violations of the U.S. Foreign Corrupt Practices Act.
Pfizer (PFE) posted a more modest loss after the drug giant announced that it has entered into an agreement to sell its infant nutrition business to Nestlé for $11.85 billion in cash.
The major averages climbed well off their lows for the session but still closed firmly in negative territory. The Dow closed down 102.09 points or 0.8 percent to finish at 12,927.17, while the NASDAQ fell 30.00 points or 1 percent to 2,970.45 and the S&P 500 dropped 11.59 points or 0.8 percent to 1,366.94.
by RTT Staff Writer
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