The South Korea stock market on Thursday wrote a finish to the four-day winning streak in which it had collected more than 35 points or 2.9 percent. The KOSPI finished just above the 1,995-point plateau, and now analysts are forecasting additional selling pressure at the opening of trade on Friday.
The global forecast for the Asian markets suggests consolidation, with investors waiting on the sidelines ahead of the closely watched employment report from the United States later in the day. Adding to the cautious sentiment are comments from European Central Bank President Mario Draghi, who said that the euro area faces economic uncertainty despite signs of stabilization in the first quarter. The European and U.S. markets finished lower, and the Asian bourses are expected to follow that lead.
The KOSPI finished slightly lower on Thursday following losses from the technology stocks, automobile producers and shipbuilders.
For the day, the index eased 3.96 points or 0.2 percent to finish at 1,995.11 after trading between 1,990.45 and 1,998.90 on turnover of 4.6 trillion won.
Among the decliners, STX Offshore and Shipbuilding shed 2.7 percent, while Daewoo Shipbuilding and Marine Engineering lost 2.2 percent, Hyundai Motor fell 0.9 percent, KIA Motors dropped 2 percent, Samsung Electronics eased 0.6 percent and LG Display plummeted 6.6 percent.
The lead from Wall Street is negative as stocks moved mostly lower on Thursday, with traders reacting negatively to a mixed batch of U.S. economic data. Caution ahead of Friday's closely watched monthly jobs report also contributed to some risk aversion.
Stocks came under pressure when the Institute for Supply Management said its non-manufacturing index dropped to 53.5 in April from 56.0 in March. While a reading above 50 indicates continued growth in the service sector, the drop surprised economists, who had expected the index to come in unchanged.
Meanwhile, the markets largely shrugged off a Labor Department report showing a bigger than expected drop in initial jobless claims in the week ended April 28. Jobless claims fell to 365,000 from the previous week's revised figure of 392,000. Economists had expected jobless claims to dip to 378,000 from the 388,000 originally reported for the previous week.
Among individual stocks, Green Mountain Coffee (GMCR) plunged 47.8 percent after the specialty coffee company reported second quarter earnings in line with estimates but slashed its full year guidance.
Auto giant General Motors (GM) also ended the day in the red despite reporting first quarter adjusted earnings that exceeded analyst estimates. GM said its revenues for the quarter rose 4 percent. A strong performance in North America helped to offset losses in Europe.
The major averages climbed off their worst levels going into the close but still ended the day firmly in the red. The Dow fell 61.98 points or 0.5 percent to finish at 13,206.59, while the NASDAQ dropped 35.55 points or 1.2 percent to end at 3,024.30 and the S&P 500 slid 10.74 points or 0.8 percent to 1,391.57.
In economic news, South Korea's foreign exchange reserves jumped to a record high in April, the Bank of Korea showed Thursday. Korea's foreign reserves were the seventh largest in the world as $316.84 billion, an increase of $0.89 billion from March mainly attributable to an increase in operating profits on the reserves and appreciation of the euro and other currencies. Securities were valued at $284.62 billion, up $30 million from the prior month. At the same time, deposits climbed $840 million to $23.83 billion.
On the corporate scene, SK Telecom's LTE network extension will be carried out by Ericsson's operating unit in Korea, LG-Ericsson and is scheduled to be completed within the first half of this year. This agreement for the commercial launch of LTE services in some of the country's major cities, including Busan and Daegu, makes Ericsson one of the operator's main partners.
by RTT Staff Writer
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