The South Korea stock market on Wednesday wrote a finish to the two-day winning streak in which it had risen more than 45 points or 2.5 percent. The KOSPI finished just shy of the 1,810-point plateau, and now investors are looking for a modest recovery when the market kicks off trade on Thursday.
The global forecast for the Asian markets suggests a mild rebound following the heavy losses in the previous session, thanks to reports from the European summit regarding the steps that the leaders are willing to take to boost economic growth. Some positive U.S. economic data adds to the sentiment, showing a bigger than expected increase in new home sales and also an increase in selling prices. The European markets were down and the U.S. bourses were mixed, and the Asian markets are tipped to open higher.
The KOSPI finished sharply lower on Wednesday following losses from the technology stocks and shipbuilders, among others.
For the day, the index plummeted 20.07 points or 1.10 percent to finish at 1,808.62 after trading between 1,796.50 and 1,815.33 on volume of 4.14 trillion won.
Among the decliners, Daewoo Shipbuilding & Marine Engineering slipped 5.7 percent, while Hyundai Heavy Industries shed 2.9 percent, SK Hynix dropped 4.9 percent, LG Display lost 4 percent and POSCO retreated 1 percent.
The lead from Wall Street is upbeat as stocks staged a significant recovery on Wednesday afternoon after moving sharply lower in the morning. Continued worries about the financial situation in Europe contributed to the early weakness, which came as European leaders held a closely watched summit in Brussels.
Traders were particularly worried about the potential impact of Greece leaving the eurozone after the debt-plagued nation's recent failure to form a government. However, the rebound by the markets was attributed to reports from the summit regarding the steps that the leaders are willing to take to boost economic growth.
Among the items under discussion, Italian Prime Minister Mario Monti and French President Francois Hollande have agreed to consider all possible measures to boost European growth, including euro zone bonds. In addition, German Chancellor Angela Merkel is advocating a eurozone-wide bank deposit guarantee.
Adding to the positive sentiment, the Commerce Department reported that new home sales rose 3.3 percent to an annual rate of 343,000 in April from the revised 332,000 in March. Economists had expected 335,000 from the 328,000 originally reported for March. In addition, the median sales price of new houses sold in April was $235,700, up 0.7 percent from $234,000 in March and up 4.9 percent from $224,700 a year ago.
Despite the recovery by the broader markets, Dell (DELL) continued to post a steep loss, with the PC giant tumbling 17.2 percent after reporting weaker than expected first quarter results and providing disappointing second quarter revenue guidance.
The major averages eventually ended the session mixed, with the Dow stuck just below the unchanged line. The Dow edged down 6.66 points or 0.1 percent to finish at 12,496.15, while the NASDAQ rose 11.04 points or 0.4 percent to end at 2,850.12 and the S&P 500 crept up 2.23 points or 0.2 percent to 1,318.86.
by RTT Staff Writer
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