The South Korea stock market has closed lower now in three straight sessions, falling almost 45 points or 2.2 percent along the way. The KOSPI finished just above the 1,955-point plateau, and now traders may be tempted to go bargain hunting when the market opens on Tuesday.
The global forecast for the Asian markets is mixed with a slight upside bias, as investors are expected to go shopping after the bourses took heavy damage on Monday. The upside may be limited by concerns about the new government in Greece, which has vowed to end austerity measures and reject the terms of Greece-Troika bailout deal. The European and U.S. markets were mixed to higher, and the Asian bourses figure to follow suit.
The KOSPI finished sharply lower on Monday following heavy damage among the technology stocks, steel producers and oil companies.
For the day, the index tumbled 32.71 points or 1.64 percent to finish at 1,956.44 after trading between 1,952.42 and 1,960.51. Volume was 527 million shares worth 4.69 trillion won. There were 622 decliners and 211 gainers.
Among the decliners, Samsung Electronics shed 1.32 percent, while POSCO lost 1.07 percent, LG Chem dropped 3.29 percent, Hyundai Heavy Industries fell 3.32 percent, SK Innovation plunged 4.66 percent and LG Electronics plummeted 3.19 percent.
The lead from Wall Street is cautiously optimistic as stocks showed a lack of direction on Monday, with traders expressing uncertainty about the situation in Europe following recent election results. Selling pressure remained relatively subdued, however, limiting the downside for the markets. The markets recovered from weakness in early trading but ended the day nearly flat.
The slow start reflected a negative reaction to election results in France and Greece, which some saw as a setback to the progress achieved thus far on the European debt crisis.
Francois Hollande won a run-off election against French President Nicolas Sarkozy and will become France's first Socialist president since 1995. Hollande has expressed significant opposition to using austerity measures to address the European debt crisis, arguing that the focus should be more on economic growth than cutting government spending.
Additionally, the results of Greek elections pointed to a hung parliament, with no single party getting adequate votes to form a government. Many Greek voters turned to anti-bailout parties.
Among individual stocks, Vertex Pharmaceuticals (VRTX) moved sharply higher after the biotech company released data showing that its cystic fibrosis combination therapy resulted in significant improvements in lung function. Shares of Tyson Foods (TSN) also jumped after the meat producer reported quarterly earnings that beat estimates.
Meanwhile, Cognizant Technology (CTSH) came under pressure after the information technology services provider reported first quarter earnings growth but lowered its full-year guidance. AIG (AIG) also closed in the red after the company said the Treasury has priced an offering of 163.9 million shares of its common stock at $30.50 per share.
The major averages eventually finished the session mixed, as the Dow fell 29.74 points or 0.2 percent to finish at 13,008.53, while the NASDAQ edged up 1.42 points or 0.1 percent to end at 2,957.76 and the S&P 500 crept up by 0.48 points or less than a tenth of a percent to 1,369.58.
In economic news, producer prices in South Korea eased a seasonally adjusted 0.1 percent on month in April, the Bank of Korea said on Tuesday, after collecting 0.6 percent in March.
By category, prices for agricultural, forestry and marine products fell 3.5 percent, while manufacturing industry products added 0.2 percent, electric power, water and gas supply eased 0.2 percent and services collected 0.2 percent.
On an annual basis, producer prices were up 2.4 percent after adding 2.8 percent in March.
by RTT Staff Writer
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