Plus   Neg

South Korea Stocks May Halt Losing Streak

The South Korea stock market has moved lower now in two straight sessions, shedding almost 35 points or 1.9 percent en route to a fresh three-month closing low. The KOSPI closed just above the 1,860-point plateau, and now analysts are forecasting a mild recovery at the opening of trade on Monday.

The global forecast for the Asian markets is cautiously optimistic, boosted by bargain hunting after taking heavy damage last week. Optimism over hopes for a resolution of the U.S. fiscal cliff is likely to be tempered by increasing geopolitical concerns in the Middle East. The negotiations between U.S. President Barack Obama and Congressional leaders began on Friday, as they attempt to come to a solution on the impending fiscal cliff. The meetings were said to be constructive, fueling hopes that the problem may soon be solved. But the escalation of the conflict between Israel and Hamas in the Gaza strip has raised concerns that the situation could develop into all-out war in the region. The European markets were down on Friday and the U.S. bourses were up, and the Asian markets are tipped to follow the latter lead.

The KOSPI finished modestly lower on Friday mixed performances from the technology stocks and the automobile producers.

For the day, the index shed 9.89 points or 0.53 percent to finish at 1,860.83 after trading between 1,856.81 and 1,872.69. There were 585 decliners and 241 gainers.

Among the actives, S.M. Entertainment plummeted 15 percent and Samsung Electronics dropped 1.8 percent, while Hyundai Motor jumped 1.9 percent, Kia Motors surged 6 percent and Korea Electric Power Corp (KEPCO) climbed 1.1 percent.

The lead from Wall Street is positive as stocks finished Friday's session with modest gains, bouncing back from early losses following what was deemed a constructive meeting in Washington on the fiscal cliff.

Shares showed weakness early in the session, continuing a downtrend that has marked the last couple weeks. On Thursday, the Dow and the NASDAQ recorded their lowest closing levels since June.

Worries that the President and the Congressional leadership would not be able to work out a long-term fix to the looming fiscal cliff has weighed on stocks since the election.

On Friday, President Obama met with top-ranking members of Congress to work on a deal. News that the meeting had been constructive drove a mid-day advance on Wall Street.

In corporate news, PC maker Dell said its quarterly profit fell 47 percent, amid lower sales and deteriorating margins. The company's results missed expectations. Dell also issued a cautious forecast for the fourth quarter. Dell's stock fell sharply on the news.

The major U.S. markets were higher on Friday as the Dow Jones Industrial Average rose 45.93 points or 0.37 percent to finish at 12,588.31, while the NASDAQ climbed 16.19 points or 0.57 percent to end at 2,853.13 and the S&P 500 advanced 6.55 points or 0.48 percent to close at 1,359.88.

In economic news, South Korea's household income grew at a faster pace in the third quarter, but spending growth slowed, Statistics Korea reported on Friday. Household income advanced 4.6 percent on year, following a 3.7 percent rise in the second quarter. Meanwhile, household spending growth slowed to 1 percent from 3.6 percent in the prior quarter.

The economy grew at the slowest pace in nearly three years in the third quarter. The gross domestic product expanded 0.2 percent on quarter in the third quarter, slower than the 0.3 percent increase in the second quarter.

by RTTNews Staff Writer

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