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More Pain Predicted For South Korea Stock Market

5/6/2012 7:30 PM ET

The South Korea stock market has closed lower now in back-to-back sessions, giving away almost 10 points or 0.5 percent along the way. The KOSPI finished just below the 1,990-point plateau, and now investors are bracing for additional carnage when the market kicks off trade on Monday.

The global forecast for the Asian markets is grim following disappointing employment data from the United States, while Eurozone private sector activity declined in April at the fastest rate since October 2011. In addition, Germany's services sector grew less than expected in April, and the French service sector contracted. Adding to the uncertainty, Francois Hollande was crowned the new President of France beating Nicholas Sarkozy. The European and U.S. markets were down, and the Asian bourses are tipped to follow suit.

The KOSPI was slightly lower on Friday following losses from the technology stocks and automobile producers.

For the day, the index lost 5.96 points or 0.3 percent to finish at 1,989.15 after trading between 1,981.58 and 1,992.10.

Among the decliners, Samsung Electronics shed 2.9 percent, while Hyundai Motor lost 3.2 percent and KIA Motors fell 2.6 percent.

Moving higher, SK Hynix climbed 3.3 percent, while STX Corporation jumped 3.5 percent, Korea Electric Power Corp spiked 3.7 percent and Hi-Mart collected 2.5 percent.

The lead from Wall Street is negative as stocks moved sharply lower on Friday as disappointing jobs data generating broad based selling pressure as the Labor Department reported much weaker than expected job growth in April.

Employment increased by 115,000 jobs in April compared to expectations for an increase of about 165,000 jobs. While the Labor Department also said that the unemployment rate edged down to 8.1 percent in April from 8.2 percent in March, the drop was largely due to a decrease in the size of the labor force.

Among individual stocks, shares of Qlogic (QLGC) fell 9.5 percent after the storage-networking technology company reported better than expected fourth quarter earnings but on weaker than expected revenues. Kraft (KFT) also ended the day in the red even though the food giant reported better than expected first quarter results.

Meanwhile, shares of LinkedIn (LNKD) jumped 7.2 percent after the online professional network operator reported first quarter results that exceeded estimates and provided upbeat guidance.

In other news, Facebook set the price range for its initial public offering at $28 to $35 per share. The social networking giant expects the much anticipated IPO to raise up to $13.6 billion and give the company a market value as high as $96 billion.

After moving sharply lower in morning trade, the major averages remained firmly negative throughout the afternoon. The Dow slid 168.32 points or 1.3 percent to finish at 13,038.27, while the NASDAQ plunged 67.96 points or 2.3 percent to end at 2,956.34 and the S&P 500 fell 22.47 points or 1.6 percent to 1,369.10. The losses resulted in steep losses for the week. The Dow fell by 1.4 percent, while the NASDAQ tumbled by 3.7 percent and the S&P 500 dropped by 2.4 percent.

by RTT Staff Writer

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