The South Korea stock market has moved lower in two of three trading days since the end of the three-day winning streak in which it had climbed almost 35 points or 1.9 percent. The KOSPI finished just above the 1,820-point plateau, and now analysts are forecasting further consolidation at the opening of trade on Monday.
The global forecast for the Asian markets is negative thanks to ongoing concerns about the debt situation in Spain. Eurozone finance ministers on Friday gave final and unanimous approval for a 100 billion euro bailout deal for troubled Spanish banks. In addition, the Spanish government cut its economic forecast on Friday and sees the recession extending into next year as it adopts more austerity measures. The European and U.S. markets ended lower, and the Asian markets are expected to open in similar fashion.
The KOSPI finished flat on Friday as gains from the technology stocks were wiped out by weakness from the financial shares and airlines.
For the day, the index eased 0.03 points to finish at 1,822.93 after trading between 1,818.84 and 1,830.26. Volume was 405.6 million shares worth 3.6 trillion won. There were 404 decliners and 381 gainers.
Among the actives, SK Hynix spiked 4.17 percent, LG Display climbed 2.57 percent and Kia Motors jumped 1.06 percent, while Hyundai Motor shed 0.45 percent, Shinhan Financial Group dropped 1.39 percent, Samsung Securities lost 0.83 percent and Korean Air plunged 2.32 percent.
The lead from Wall Street suggests consolidation as stocks lost ground on Friday, hurt by worries about Europe and lingering concerns about the global economy. With the slide, the markets surrendered most of the gains posted earlier in the week.
Europe was in focus as the eurozone finance ministers gave final and unanimous approval for a 100 billion euro bailout deal for troubled Spanish banks. In the beginning, 30 billion euros will be set aside for use in case of "urgent unexpected financing needs," the Eurogroup said. The first tranche is likely to be made available by the end of this month.
Wall Street's decline was also partly due to profit taking following recent gains on the stock market, which lifted the major averages back toward near-term resistance. The markets also digested the latest batch of earnings news, including quarterly results from tech giants Microsoft (MSFT) and Google (GOOG).
On the corporate front, Google's second quarter adjusted earnings rose to $10.12 per share from $8.74 per share last year. Revenues, excluding traffic acquisition costs, totaled $8.36 billion, slightly shy of the $8.41 billion expected by analysts.
Diversified conglomerate General Electric (GE) released its second quarter results before the start of trading, reporting earnings that exceeded estimates but on slightly weaker than expected revenues. Steel stocks moved sharply lower. Universal Stainless (USAP) reported weaker than expected second quarter results.
Railroad, networking, and software stocks also came under pressure on the day. There was notable strength among oil service and housing stocks, helping to limit the downside for the markets.
The U.S. averages were firmly in the red on Friday as the Dow Jones Industrial Average fell 120.79 points, or 0.9 percent, to finish at 12,822.57, while the NASDAQ slipped 40.60 points or 1.4 percent to end at 2,925.30 and the S&P 500 dropped 13.85 points, or 1 percent to close at 1,362.66.
In corporate news, Boeing Co. (BA) and Korean Air finalized an order for two 777-300ERs (Extended Range) airplanes. The order is valued at $596 million at Boeing list prices. Korean Air currently operates 34 777 airplanes that include 10 777-300ERs. With this order, the airline has six more 777-300ERs on order with Boeing.
by RTT Staff Writer
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