The South Korea stock market headed south again on Friday, one session after it had halted the four-day losing streak in which it had given away almost 25 points or 1.2 percent. The KOSPI finished just below the 1,920-point plateau, although now traders are looking for a positive bounce when the market kicks off trade on Monday.
The global forecast for the Asian markets suggests bargain hunting after heavy damage last week, thanks to encouraging reports from the European Central bank and the U.S. Federal Reserve. The European and U.S. markets finished firmly higher on Friday, and the Asian bourses are expected to open in similar fashion.
The KOSPI finished sharply lower on Friday following heavy damage to the technology stocks, shipyards and financial shares.
For the day, the index plummeted 22.73 points or 1.17 percent to finish at 1,919.81 after trading between 1,913.75 and 1,927.10. Volume was 615.9 million shares worth 4.3 trillion won. There were 542 decliners and 278 gainers.
Among the decliners, Samsung Electronics shed 0.93 percent, while SK Hynix dropped 2.68 percent, Hana Financial plunged 4.4 percent, Woori Finance dipped 3.9 percent, Daewoo Shipbuilding and Marine Engineering fell 3.4 percent and Hyundai Heavy Industries retreated 2.4 percent.
The lead from Wall Street is positive as stocks showed a substantial turnaround on Friday after moving lower in early trading. The markets benefited from a positive reaction to the latest reports regarding the world's central banks, which indicated that the European Central Bank is considering setting yield band targets under a new bond-buying program.
Setting a band is an option gaining in favor among central bankers, but the decision would not be made before the ECB's next monetary policy meeting on September 6.
Buying interest was also generated by news of a letter Federal Reserve Chairman Ben Bernanke sent to Rep. Darrell Issa, R-Calif., defending the Fed's actions to support the economy. In the letter, which was obtained by the Wall Street Journal, Bernanke also told Issa there is "scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery."
The early weakness followed the Commerce Department's report on durable goods orders in of July. While the report showed a much bigger than expected increase in durable goods orders, the increase was largely due to strength in the volatile transportation sector. The report also showed a continued decrease by a key indicator of business spending.
Traders also remained leery about the situation in Europe, where Greek Prime Minister Antonis Samaras held a meeting with Chancellor Angela Merkel. Samaras pledged that Greece will "stick to its commitments and fulfill its obligations" but noted that the debt-plagued nation needs "time to breathe" as it undertakes crucial reforms. Merkel did not immediately respond to the request for more time to implement reforms but stressed that Germany wants to help Greece remain in the eurozone.
The major U.S. averages moved roughly sideways going into the close, ending the Friday firmly in positive territory. The Dow jumped 100.51 points or 0.8 percent to finish at 13,157.97, while the NASDAQ rose 16.39 points or 0.5 percent to end at 3,069.79 and the S&P 500 advanced 9.05 points or 0.7 percent to close at 1,411.13. Despite the gains on the day, the major averages all moved lower for the week. The Dow fell by 0.9 percent, while the NASDAQ and the S&P 500 slid by 0.2 percent and 0.5 percent, respectively.
In economic news, an index measuring consumer sentiment came in at a score of 99.0 in August, the Bank of Korea said on Monday - down from 100 in July. Consumer sentiment on current living standards remained unchanged at 87, while that concerning their outlook dropped by one point to 92.
Consumer sentiment regarding current domestic economic conditions fell by four points to 67, and that on their future outlook by three points to 78. Consumer sentiment on prospective changes in household income declined by one point to 94, while that on prospective spending decisions rose by one point to 107.
On the corporate scene, A U.S. jury on Friday found Samsung Electronics to have violated some of Apple Inc.'s patents related to mobile devices and awarded $1.05 billion in damages, in perhaps the biggest-ever technology patent trial. The nine-member jury of a federal court in San Jose, California found Samsung smartphones and devices infringed upon six of seven patents of Apple, with three of them pertaining to touch-screen features. The jury also did not find Apple devices to have violated any of Samsung patents under scrutiny in the trial.
by RTT Staff Writer
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