The South Korea stock market on Wednesday wrote a finish to the four-day losing streak in which it had fallen more than 45 points or 2.5 percent. The KOSPI closed just below the 1,895-point plateau, although now investors are bracing for renewed selling pressure when the market opens on Thursday.
The global forecast for the Asian markets suggests consolidation thanks to popular resistance to austerity measures in Europe, as well as uninspired economic data from the United States. Anti-austerity protests broke out across Europe as labor unions organized coordinated walkouts in Greece, Spain, Portugal and Italy. Lingering concerns over the U.S. fiscal cliff add to the cautious sentiment. The European and U.S. markets were down on Wednesday and the Asian bourses are expected to open in similar fashion.
The KOSPI finished slightly higher on Wednesday following gains among the technology stocks and the industrials.
For the day, the index added 4.34 points or 0.23 percent to finish at 1,894.04 after trading between 1,880.61 and 1,895.48.
Among the actives, LG Electronics spiked 4.59 percent, while SK Hynix jumped 4.93 percent, Samsung Electronics added 0.44 percent, Hyundai Motor climbed 2.12 percent, Doosan Heavy Industries surged 3.93 percent and LG Display shed 0.29 percent.
The lead from Wall Street is broadly negative as stocks moved substantially lower on Wednesday after failing to sustain an initial upward move. The sell-off extended a recent downward trend by the markets, which have fallen sharply since last week's elections.
While bargain hunting helped to push stocks higher, interest was subdued following a disappointing retail sales report that showed a 0.3 percent decline in October following an upwardly revised 1.3 percent increase in September. Economists had expected a fall of 0.1 percent following the 1.1 percent gain in September.
But stocks pulled back shortly thereafter on lingering concerns about whether lawmakers in Washington will be able to reach an agreement about the looming fiscal cliff. Without action by Congress, approximately $600 billion in automatic tax increases and government spending cuts go into effect at the end of the year.
Stocks accelerated to the downside during an afternoon press conference by President Barack Obama, who made remarks signaling that a familiar battle over higher taxes may lead to continued gridlock on Capitol Hill.
Meanwhile, the minutes of the Federal Reserve's most recent monetary policy meeting showed that the central bank is likely to launch a new bond buying program next year following the expiration of Operation Twist. The Fed said several participants indicated that additional asset purchases would be appropriate in order to achieve a substantial improvement in the labor market.
The major U.S. averages were sharply lower on Wednesday as the Dow plunged 185.23 points or 1.5 percent to finish at 12,570.95, while the NASDAQ tumbled 37.08 points or 1.3 percent to end at 2,846.81 and the S&P 500 plummeted 19.04 points or 1.4 percent to close at 1,355.49. The losses pulled the Dow and the NASDAQ down to their lowest closing levels in over four months, while the S&P 500 hit a new three-month low.
by RTT Staff Writer
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