The South Korea stock market has finished higher now in three straight sessions, climbing more than 75 points or 4 percent along the way. The KOSPI finished just below the 1,845-point plateau, and now analysts are predicting continued if slowing upside at the opening of trade on Tuesday.
The global forecast for the Asian markets is mixed to higher following continued positive momentum from Europe - although the upside may be capped by profit-taking after several days of rallies. Italy and Spain saw their borrowing costs ease on Monday as investor confidence improved on hopes of some crucial action from the European Central Bank. The European markets were sharply higher and the U.S. bourses were mixed but little changed - and the Asian markets figure to split the difference.
The KOSPI finished modestly higher on Monday, supported by gains from the technology stocks and automobile producers.
For the day, the index collected 14.63 points or 0.80 percent to finish at 1,843.79 after trading between 1,841.40 and 1,850.27. Volume was 333.5 million shares worth 3.83 trillion won.
Among the gainers, Samsung Electronics climbed 3.41 percent, while SK Hynix added 0.71 percent, Hyundai Mobis spiked 4 percent, Hyundai Motor jumped 1.8 percent, SK Innovation collected 1.7 percent, KB Financial Group spiked 2.5 percent and Hyundai Heavy Industries gathered 0.2 percent.
The lead from Wall Street provides little clarity as stocks finished a choppy session with mild losses. With traders looking ahead to key information due out later in the week, the market was unable to find significant momentum.
Traders resisted the temptation to take profits after the recent run-up, as hope remains for a solution for the euro-zone debt crisis or for signs of additional stimulus from the Federal Reserve. Stocks saw some modest gains by the mid-morning, but a mid-day slide reversed that advance, however, and shares held below the flat line through much of the rest of the day.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti again vowed to defend the euro during a phone conversation on Sunday. They also stated that the decisions made at the EU summit last month must be implemented as quickly as possible.
Italy and Spain saw their borrowing costs ease on Monday on hopes of action from the European Central Bank, which holds its rate-setting session later this week. The yield on the 10-year Italian bond dropped to 5.96 percent from 6.19 percent on June 28. The 5-year debt fetched a yield of 5.29 percent, down from 5.84 percent at the previous sale on June 28. Spanish 10-year bond yield fell to 6.59 percent in the secondary market.
On the corporate front, CB&I (CBI) has reached a definitive merger deal to acquire Shaw Group (SHAW) for around $3 billion. The company will pay $46 per share in a cash and stock transaction. CB&I dropped $5.76, or 14.2 percent, to close at $34.94.
The Dow Jones Industrial Average slipped 2.65 points, or less than 0.1 percent, to close at 13,073.01. The gains last week allowed the Dow to push back above the 13,000 mark. The S&P 500 dipped less than a point to close at 1,385.30. The NASDAQ was the worst performer among the major averages. It slipped 12.25 points, or 0.41 percent, to close at 2,945.84.
In economic news, South Korea's industrial output was down a seasonally adjusted 0.4 percent on month in June, Statistics Korea said on Tuesday - in line with expectations following the 1.1 percent increase in May. On a yearly basis, industrial production was up 1.6 percent, beating estimates for a gain of 1.0 percent but slowing from the 1.6 percent increase in the previous month.
The index of all industry production was down 0.3 percent on month and up 0.1 percent on year.
Also, confidence among South Korean manufacturers declined to its lowest level in more than three years amid fears that a worsening Eurozone situation may affect firms' export intentions in the coming month. A survey report released by the Bank of Korea showed on Monday that the business outlook index for the manufacturing sector fell to 70 in August, the lowest score since May 2009, from 81 in July. The manufacturing confidence index for July was at 71, falling sharply from 82 in June.
by RTT Staff Writer
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