The South Korea stock market on Thursday halted the three-day winning streak in which it had collected almost 50 points or 2.6 percent. The KOSPI finished just below the 1,890-point plateau, and now traders are bracing for further damage when the market kicks off trade on Friday.
The global forecast for the Asian markets remains soft on disappointing economic data from around the globe. China's manufacturing sector performance continued to worsen with the factory activity entering an eighth month of contraction in June. Spain's borrowing costs climbed again at a debt auction on Thursday despite rising demand. In the United States, existing home sales fell more than expected, and Moody's downgraded 14 of the world's largest banks. The European and U.S. markets were sharply lower, and the Asian bourses are tipped to follow suit.
The KOSPI finished modestly lower on Thursday following losses from the energy producers and the steel companies.
For the day, the index shed 14.96 points or 0.79 percent to finish at 1,889.15 after trading between 1,879.65 and 1,900.44 on volume of 3.74 trillion won. There were 415 gainers and 402 decliners.
Among the actives, SK Innovation lost 3.34 percent, while Samsung Engineering plunged 4.13 percent, Hyundai Department Store surged 4.44 percent and Hi-mart plummeted 8.96 percent.
The lead from Wall Street is broadly negative as stocks moved sharply lower on Thursday after showing a lack of direction early in the session. A batch of disappointing U.S. economic data inspired traders to cash in on the gains from the past two weeks.
The sell-off followed a National Association of Realtors report showing that existing home sales fell by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists had expected a slightly more modest decrease to an annual rate of 4.57 million.
A separate report from the Philadelphia Federal Reserve showed that its diffusion index of current activity fell to a negative 16.6 in June from a negative 5.8 in May, with a negative reading indicating a contraction in regional manufacturing activity.
Additionally, the Labor Department's report on initial jobless claims in the week ended June 16 showed that claims fell modestly but still beat estimates.
The release of the disappointing data came on the heels of the Federal Reserve's announcement Wednesday of the extension of its "Operation Twist" program until the end of the year. Fed Chairman Ben Bernanke also noted that the central bank is prepared to take additional steps to prop up the sluggish economy.
Among individual stocks, shares of Bed Bath & Beyond (BBBY) tumbled 17 percent after the home furnishings retailer reported better than expected first quarter earnings but provided disappointing guidance. With the loss, Bed Bath & Beyond fell to a three-month closing low.
The major averages saw further downside going into the close, ending the session just off their worst levels of the day. The Dow plunged 250.82 points or 2 percent to finish at 12,573.57, while the NASDAQ tumbled 71.36 points or 2.4 percent to end at 2,859.09 and the S&P 500 plunged 30.18 points or 2.2 percent to 1,325.51.
by RTT Staff Writer
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